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
Side Chain
A separate blockchain ledger that runs parallel with the primary blockchain.
Bots
Refers to software or programmes that automatically trade based on preset behaviours.
Decentralized Finance (DeFi)
Decentralized Finance (DeFi) refers to the movement of building decentralized financial applications that have no central authority and is censorship free.
Algorithmic Stablecoin
Algorithmic stablecoins are tokens pegged to a fiat currency which is usually the US dollar, purely through software and specific conditions.
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