none of you actually knows how liquidity works

Please explain how liquidity works

3000 $anon for the best explainer

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That sounds about right, have you checked out bountcaster? It's pretty cool

If I remember correctly from my Harmony One days liquidity is provided via liquidity pools. Liquidity pools are used for swapping between two coins. In exchange for providing liquidity holders of a token pair that lock an equal value of two coins into a contract receive a percentage of the fees from users swapping between the two coins. When locking your coins in the coins get removed from your wallet and you get a liquidity pair token in return. You can then swap that liquidity token back into the two coins at a later date. I could be wrong as it's been a while.