cryptocurrency exchange
                     Cryptocurrency Exchange
LIQUIDITY ENHANCEMENT AND ITS SIGNIFICANCE IN TRADING CRYPTO
Tomorrow's Crypto Industry will not be the same as it is today. It evolves and updates itself  
on a daily basis, allowing CryptoPreneurs to enlighten themselves and broaden their  
perspective on other discussions such as liquidity. But let us first discuss what these term are 
 and what all are the perquisites and features of this type of exchange to make the discussion 
 more lucid.
Crypto currency, also known as crypto-currency or crypto, is any type of digital or virtual  
currency that uses cryptography to secure transactions. Crypto currencies lack a centralized  
issuing or regulating authority, instead relying on a decentralized system to record  
transactions and issue new units. There are numerous advantages it provides when  
deployed using the decentralized exchanges. But firstly, what is a decentralized exchange?  
Decentralized crypto exchanges (DEXs) are blockchain-based apps that facilitate large-scale  
crypto asset trading among many users.
Thus blockchain is a method to store the transactions into a ledger block which makes it  
almost impossible to hack, manipulate or cheat the system. Instead of the traditional  
approach of acting as a financial intermediary between buyers and sellers, they do it entirely  
through automated algorithms. Decentralization is significant as it provides a robust,  
efficient and secure medium for the users to perform their transactions. Also on the other  
hand, decentralization helps to cut costs that are required to reckon the mediators. Since  
there are no mediators in a decentralized mode of exchange, there is no transaction or  
miscellaneous fee that will be required to pay. Thus, the most important factor that is looked  
up to is the term ‘Liquidity’.
Liquidity in crypto exchange generally signifies the ease with which an asset can be  
converted into cash in financial markets. In the context of crypto currencies, liquidity refers  
to a coin's ability to be easily converted into cash or other coins. Thus, any trader or investor 
 will surely look up to that kind of currency for the sake of investing, which can be easily  
liquefied without any hassle.
Before trading, crypto currency traders must evaluate all three types of liquidity so that they  
can identify the best asset and the best time to trade. Liquidity is further classified under  
categories:-
Asset Liquidity - The function between buyer and seller for the desired asset.  
Exchange Liquidity - The overall function of traders in the Crypto currency 
Exchange.  Market Liquidity - The overall health of the market.
What is the Impact of Liquidity in Crypto currency Exchange?
Liquidity is an indispensible factor in finance, and there is no doubt that good liquidity can 
 automatically build trust among market traders.
Consistency
Liquidity improves market stability by shielding traders and digital currencies from market  
fluctuations. The asset is unaffected by the influence of major market participants. For  
example, buying and selling Bitcoin in bulk may have little effect on the price of Bitcoin, but  
in the case of other altcoins, bulk trading may have an effect on the price of the altcoin. The 
 added benefit of Stability is prediction. Traders can forecast future market prices.
Reasonable cost
Good liquidity ensures that market participants pay fair and equal prices. The large volume 
 of buyers and sellers is the reason for the reasonable price. The asset with a high trading  
volume allows sellers to sell it at a competitive price, and buyers will naturally stick with it.  
As a result, a stable equilibrium is been created, which is critical for a healthy market.
Robust Transactions
High liquidity also indicates a greater number of traders, which means that buy and sell 
 orders will fill out faster than in a low liquidity environment. This, of course, increases  
trading speed, which improves the user experience.
Thus, one of the most important factors in the financial market is liquidity. It is best to trade  
in a market with high liquidity so that one can easily enter and exit the market. Due to a lack 
 of liquidity, any assets are purchased and sold at unfavourable or unappealing prices. Thus,  
the term liquidity is very important in financial markets, and the crypto exchange, which in  
the recent digital world contributes more to the global financial sector, requires liquidity.
Thus, when developing your own crypto currency exchange platform, keep liquidity in mind.