Crypto liquidity explained: what it is and why it matters
What liquidity is, why it decides whether you can sell, what locked or burned liquidity means, and how to read exit risk.
What liquidity is
When you buy or sell a token on a decentralised exchange, you trade against a pool that holds the token and a coin like SOL, ETH or USDC. The money in that pool is the liquidity. The more real money there is, the more you can sell without crashing the price.
Why the dollar number can mislead
Some sites value a whole pool at the token's own price, which can show millions in liquidity where there are only a few thousand dollars of real money. DexGrade reads the pools itself and counts the real money that sellers can take out.
Locked or burned liquidity
Whoever holds the pool's tokens can remove the liquidity. If they are burned or locked in a locker contract, nobody can pull them for that period. If the developer holds them, they can rug at any time. DexGrade shows which applies when it can read it.
Exit risk
DexGrade also shows how much you could sell before the price drops 5%, and how far the price would fall if the biggest holders sold. That tells you whether you could actually get out of a position, not just what the chart says.