@tamara645
Strong secondary market liquidity allows users to transact efficiently, supporting ecosystem participation and investor confidence. Tokens with limited liquidity often experience higher price spreads, increased volatility, and difficulty for participants to convert assets into cash or other tokens. Active secondary markets attract market makers, arbitrageurs, and long-term investors, creating a self-reinforcing cycle of engagement and stability. Projects may encourage liquidity through incentives like LP rewards, staking bonuses, or partnerships with exchanges. A well-supported secondary market also facilitates derivatives trading, lending, and collateral usage. Ensuring consistent liquidity across platforms is therefore essential for both price stability and the practical utility of the token in its broader ecosystem.
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