none of you actually knows how liquidity works

Please explain how liquidity works

3000 $anon for the best explainer

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You lock up your ETH in a trove, draw LUSD with a small fee, and then you can use your LUSD in defi. If you want your ETH back, you return your LUSD and reclaim your ETH. The neat thing is that unlike other loans in defi, the LUSD is interest free! You just pay the initial fee.