# Liquidity

### How to Add Liquidity

* Go to Liquidity page.
* Connect to your Metamask wallet via the connect wallet button top right corner of the page.
* Click the add liquidity button.
* For the top Input, click 'Select a currency' (or paste the contract address of the currency which you want). Then choose one of the token in the liquidity pair you want to add liquidity to.
* For the bottom input, click ‘Select a currency’ (or paste the contract address of the currency which you want). And choose the other token in the liquidity pair you want to add liquidity to.
* Enter an amount on one of the tokens under “Input”. The other should be calculated and filled automatically.
* Click the confirm button.
* Approve the adding liquidity action on your Metamask wallet.

### How to Remove Liquidity

* Go to Liquidity page.
* Select liqiudity which you add before.
* Click the remove button.
* Type amount of how much liquidity you want to remove.
* Click the confirm buttton.
* Approve the removing liquidity action on your Metamask wallet.

#### [What Is Liquidity?](https://coinmarketcap.com/alexandria/glossary/liquidity)

In its most simple form, liquidity refers to how easy it is to convert [cryptocurrency](https://coinmarketcap.com/alexandria/glossary/cryptocurrency) into cash quickly — and whether this can be achieved without the asset’s value suffering. [Bitcoin](https://coinmarketcap.com/alexandria/glossary#b), the world’s first and most actively traded [digital asset](https://coinmarketcap.com/alexandria/glossary/cryptoasset), is often recognized as being the most liquid virtual currency. Liquidity can also be used when weighing up which [exchanges](https://coinmarketcap.com/alexandria/glossary/exchange) enable trades between [fiat](https://coinmarketcap.com/alexandria/glossary/fiat) and crypto to be completed instantly and without price slippage. The levels of liquidity will often depend on how many users that particular platform has.

In a perfectly competitive market, liquidity will erode the ability to charge a discounted price or a premium. This is because active trading of a cryptocurrency or any asset class helps avoid price distortions. 

A cryptocurrency which is liquid typically trades around its market price. 

The most liquid market in the world is the forex market. On average, it recorded $6.6 trillion in daily transactions a day as of April 2019, according to the Bank for International Settlements. 

On the other hand, the real estate market is typically considered to be illiquid. This is because properties are often not easily sold, and can involve a long chain, a lot of paperwork as well as be subject to other variables. 

Liquid markets are typically preferred by traders. An illiquid market makes it very difficult for participants to enter and exit positions. 

Trading volumes for Bitcoin are now comfortably in the tens of billions on a daily basis, and have grown substantially since 2014. 

This is not to say that the bellwether currency has never experienced bouts of illiquidity. Once BTC prices crashed in 2018, volumes plummeted to around $5 billion per day. 

The liquidity of cryptocurrencies is likely to increase further if adoption rises, and virtual assets become more widely accepted as mediums of exchange.