What Is Liquidity?
In decentralized finance, liquidity refers to how much of an asset is available for trading without significantly changing its price.
A market with deeper liquidity can generally handle larger trades with less price impact. A market with limited liquidity may experience greater price movement when a trade is executed. That's why liquidity is one of the key factors an arbitrage engine needs to analyze.
Price tells you what is available.
Liquidity tells you how much can actually be traded.
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1August 30, 2026 73
