@pamela23
In the early stages of a project, low liquidity can make it vulnerable to pump-and-dump schemes. With limited buy and sell orders, a small group of traders can manipulate the price through coordinated actions. To mitigate this, projects should seed liquidity pools adequately and implement safeguards such as time-locked liquidity or automated market maker (AMM) mechanisms. Educating the community about risks and monitoring trading activity can help prevent manipulation. A gradual increase in liquidity, combined with organic user adoption, creates a healthier market environment and reduces volatility during the project’s initial growth phase.
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