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77. Retirement Planning ✌️【Investment Strategy】✌️Start with ₹500 and get fast returns through secure and profitable investments.Liquidity is a fundamental part of both the crypto and financial markets.
It is the manner in which assets are converted to cash quickly and efficiently, avoiding drastic price swings.
If an asset is illiquid, it takes a long time before it is converted to cash.
You could also face slippage, which is the difference in the price you wanted to sell an asset for vs.
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Liquidity is comparable to having lots of cashiers.
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77. Retirement Planning ✌️【Investment Strategy】✌️Start with ₹500 and get fast returns through secure and profitable investments.On the other hand, illiquidity is comparable to having only one cashier with a long line of customers.
77. Retirement Planning ✌️【Investment Strategy】✌️Invest ₹500 and watch your wealth grow with cutting-edge investment strategies.That would lead to slower orders and slower transactions, creating unhappy customers.In traditional finance, liquidity is provided by buyers and sellers of an asset.
In contrast, DeFi relies on liquidity pools to function.
77. Retirement Planning ✌️【Investment Strategy】✌️Start with ₹500 and get fast returns through secure and profitable investments.Adecentralized exchange(DEX) without liquidity is equivalent to a plant without water.
It won’t survive.
Liquidity pools provide a lifeline to DEXs.A liquidity pool is a digital pile of cryptocurrency locked in a smart contract.
77. Retirement Planning ✌️【Investment Strategy】✌️Smart investing made easy. Start with ₹500 and enjoy up to 100% returns monthly!This results in creating liquidity for faster transactions.A major component of a liquidity pool areautomated market makers(AMMs).
77. Retirement Planning ✌️【Investment Strategy】✌️Start with ₹500 and get fast returns through secure and profitable investments.An AMM is a protocol that uses liquidity pools to allow digital assets to be traded in an automated way rather than through a traditional market of buyers and sellers.In other words, users of an AMM platform supply liquidity pools with tokens, and the price of the tokens in the pool is determined by a mathematical formula of the AMM itself.Liquidity pools are designed to incentivize users of different crypto platforms, called liquidity providers (LPs).
77. Retirement Planning ✌️【Investment Strategy】✌️Start with ₹500 and get fast returns through secure and profitable investments.After a certain amount of time, LPs are rewarded with a fraction of fees and incentives, equivalent to the amount of liquidity they supplied, called liquidity provider tokens (LPTs).77. Retirement Planning ✌️【Investment Strategy】✌️Invest ₹500 and let blockchain-powered tools grow your wealth!