Liquidity refers to how easily an asset can be traded without causing large price changes.
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Short definition
Liquidity is liquidity refers to how easily an asset can be traded without causing large price changes.
Simple explanation
High liquidity usually means buyers and sellers can trade with less price impact. Low liquidity can make swaps expensive, volatile, or difficult.
Why it matters
Liquidity matters for DEX swaps, token launches, slippage, price impact, and market stability.
Example context
A token with very low pool liquidity may experience large price movement from a small trade.