@kingflynn
Deep liquidity pools reduce price volatility by absorbing large trades without significant slippage. Shallow pools make tokens highly sensitive to market orders, encouraging pump-and-dump behaviors. Assess liquidity on DEXes, CEXes, and cross-chain bridges. Monitor pool distribution, pair diversity, and stablecoin support. Projects often incentivize deeper pools through yield farming or liquidity mining to maintain market stability. Investors should be cautious when trading in low-depth pools, as price manipulation risk is higher. Adequate liquidity ensures smoother price discovery, fosters market confidence, and improves token attractiveness to both retail and institutional participants.
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