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
Virtual AMM (vAMM)
The vAMM functions similarly like an AMM but does not contain an actual asset pool.
Cold Storage
Offline storage of cryptocurrencies which is arguably safer as they also require physical access (eg. hardware wallet, paper wallets)
Dusting Attack
A new form of malicious activity in which hackers and scammers attempt to undermine the privacy of cryptocurrency users by sending little amounts of money to their wallets.
Airdrop
A way to promote cryptocurrencies by sending some free tokens to traders
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