Liquidity
By CoinGecko | Updated on Jun 13, 2023
Liquidity is a measure of resource sufficiency as it concerns a cryptocurrency market or a custodial institution. For tradable assets, it translates to investors’ freedom to make trades in any direction without significant slippage. For custodial institutions, it is the ability to satisfy withdrawal requests without significant delays or friction. A sufficiently liquid market or institution should be able to sustain this in harsh market conditions.
Related Terms
Decentralized Applications (dApps)
Applications that run on decentralized peer-to-peer networks such as Ethereum.
Staking
The state of locking-in significant amount of token to participate as a validator of a Proof-of-Stake network.
Protocol
The set of rules in a network in which participating members comply to allow proper communication.
Second-Layer Solutions
Secondary network or framework built atop an existing blockchain to address transaction speed and scalability issues.
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