Liquidity is the depth and willingness of market participants to buy and sell without materially moving token price.

In liquid markets, traders can transact what they want, when they want, at fair prices closely aligned with the prevailing market value. Strong liquidity reduces volatility, supports institutional participation, and improves trading KPIs that exchanges monitor internally. Thin liquidity amplifies price swings, widens spreads, and results in a poor user experience for traders.