| Greeting to all friends |
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I hope all of you are living your lives well. I pray that you all continue to enjoy the colors of life.I am thankful @ for organising such interesting contest.
What is liquidity? |
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In economics, liquidity refers to how quickly your asset can be converted into cash, it is called liquidity. For example, if you have gold and property, gold will be more liquid because you can always sell the gold and get cash quickly compared to the property. And most people refer to liquidity as how much cash is currently in your account. And if we talk about liquidity in terms of trading, it means the availability of buyers and sellers. The more buyers and sellers there are, the more volatile the currency will be and the easier it will be to buy and sell.
Did you provide liquidity to any dApp? |
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Yes I haven't provided liquidity on any platform yet, the downside is that I don't know much about these things, I'm just learning these things, trading is a very high risk business and a lot of hard work to do. And it also needs enough time to learn and the other reason is that cryptocurrency is not yet legalized in Pakistan, so there is no guarantee for the freaks that are in the market, and in Pakistan. Fraud is also happening to people. So for all these reasons I haven't invested in any such app yet.
Pros and Cons of providing liquidity |
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The biggest advantage of equity is easy availability and cash, you can convert your assist to cash anytime to meet your needs, besides it is a profit earning opportunity, you can invest it in any platform. You can make a good earning . When there is liquidity in the market, there is easy buying and selling. And this has the advantage that when there are more external sellers, it also reduces our cost-off transactions.
Liquidity increases the volatility of the market. The disadvantage of this is that even a small piece of news can cause a huge change in the market price or the price will fall too much or the price will go up too much, causing loss to the investors.
I would like to invite @haroonsaqlain ,@mostofajaman and @hudamalik to participate in this beautiful contest 👍
Regard @missamabbas