In the context of Ethereum (ETH) or cryptocurrency, liquidity refers to how easily and quickly ETH (or any token) can be bought or sold on the market without significantly affecting its price.

There are two main types of liquidity:

1. Market Liquidity: The availability of ETH on exchanges. High liquidity means there's a lot of trading activity and ETH can be bought/sold with minimal price slippage.


2. Liquidity Pools: In DeFi (decentralized finance), ETH is often deposited into liquidity pools (e.g., on Uniswap) to facilitate decentralized trading. Users who provide liquidity earn fees, but may face impermanent loss depending on market conditions.



Would you like to explore how to add ETH to a liquidity pool or how to measure ETH liquidity on exchanges?