#Liquidity101 The liquidity of an asset refers to its ease of being bought or sold without significantly affecting its price. In the world of cryptocurrencies, good liquidity means there are enough buyers and sellers for transactions to be smooth. On a DEX, liquidity often depends on liquidity pools, where users deposit funds to facilitate exchanges. The more liquid a market is, the narrower the spreads (the differences between buying and selling) are. Low liquidity can lead to excessive volatility. Always check the liquidity before trading!