Liquidity

Liquidity refers to the ease with which an asset can be bought or sold in the market without significantly affecting its price. In short, it's a measure of how much value is directly available and accessible to users. High liquidity indicates a robust market with ample buyers and sellers, leading to tighter spreads and more stable prices.

For web3 developers, understanding liquidity is crucial when designing decentralized applications (dApps) that involve trading or token swaps, as it directly impacts user experience and transaction efficiency. Incorporating features that enhance liquidity, such as integrating with multiple liquidity pools or employing automated market makers (AMMs), can make dApps more attractive to users.