Contest ✍️ The Tech Quiz - Season 22

in Steem4Bloggers2 months ago
Greetings to all!

Asslamo-alikum to all of my friends of Steem4Bloggers Community.Is everything is ok? my friends.I am fine Allhamdulillah, and hope all the friends are fine.I'm here for posting about contest, which has been organized by @malikusman1 and theme of the contest is The Tech Quiz - Season 22.

What is liquidity?

Liquidity is a process in cryptocurrency where traders convert their crypto assets into real money and this liquidity shows how smoothly the crypto assets are being converted into cash.Liquidity handles price realization, fluctuations and all that in the cryptocurrency market and anyone.

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Pixabay

who trades and earns money from cryptocurrency needs liquidity to convert it into real money.There is no single method for measuring liquidity in cryptocurrency, it is measured in different ways such as the bid method, and there are many other methods.

The assets are converted into real money and the prize is neither higher nor lower.The more valuable crypto assets are, the more valuable they are converted into real money due to the liquidity of crypto assets.

Did you provide liquidity to any dApp?

I don't provide liquidity to any dApp ,though I do a little trading and whenever I earn some money from them I sell them dollars in simple market and convert it to real money.When traders earn some money in crypto market then to convert it to real money there is a P2P trading method.

This process has a own market where we can buy and sell dollars so it a method uses to sell dollars to any person and get cash from them.Traders who are big levels provide liquidity to different dApps and through the liquidity they make money from them.If you convert it into real money, it has some strategies and that is the liquidity that the trader is providing, so he earns money.

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Freepik

If you have a good investment you can provide liquidity to any dApp and make money from it. This is a good way to make money from crypto currency and anyone who has an idea about it should check it out. Do proper research then they provide liquidity and make money from it because liquidity is a process in which crypto assets are converted into real money in a very smooth way.

Pros and Cons of providing liquidity.

Advantages:- The advantages of liquidity in cryptocurrency is that the market of crypto can be better positioned with liquidity and it also has the advantage of liquidity mining which can also be used to make money. Also, to stabilize the market, it is very important to convert crypto assets into real cash, which is only possible with liquidity, so these are some of the benefits of liquidity in cryptocurrencies.

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Pixabay

Disadvantage:- Disadvantages of Liquidity Cryptocurrency is that as I mentioned it converts crypto assets into real money and if the value of real money and crypto assets in Market is low then it will be a lot of issue while converting and this Another disadvantage is that if the crypto price is the not same, it changes with time.If someone invests in third parties, then they can do taxes or fraud, so these are some of the disadvantages of liquidity.

Conclusion:- So friends, that's all about liquidity in cryptocurrency.Liquidity is a method to convert the assets of cryptocurrency into real money and it measure how smoothly it's converting.It has some pros and cons , that i has been explained.Good Bye!

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Good content. I wish you good luck 🤗

 2 months ago 

Dear @shahidalinaz, indeed you have a great knowledge about liquidity, liquidity to dApp, it's pros and cons. You have well defined about this topic. Best of luck

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