Liquidity
The money you sell into.
What the pool holds. Every coin trades against a pool of SOL. When you buy, your SOL goes in and tokens come out. When you sell, tokens go in and SOL comes out. Liquidity is how much SOL is sitting there.
Thin pool, wild price. Buy 1 SOL into a pool holding 5 SOL and you move the price a lot. That move is called price impact, and you pay it on the way in and the way out.
The 10% rule of thumb. If liquidity is under 10% of market cap, the price can swing hard on small trades. MemeSim flags this on the coin page.
Who else is selling. Liquidity is shared. If three people sell before you, the pool is thinner for you. Watch the sells, not just the price.
Size to the pool. A good habit: never put in more than 1 to 2% of the pool's liquidity. Your fill stays close to the quote and you can get out.
Academy · Lesson 2
Liquidity
What the pool holds
Every coin trades against a pool of SOL. When you buy, your SOL goes in and tokens come out. When you sell, tokens go in and SOL comes out. Liquidity is how much SOL is sitting there.