Liquidity on decentralized exchanges (DEXs) is a crucial factor to understand, especially for newcomers. In simple terms, liquidity means how easily you can buy or sell a token without causing a significant price change. For meme coins, liquidity can be tricky—many of these coins start with low trading volumes, making it hard to exit your position quickly.
DEXs like Uniswap or PancakeSwap allow anyone to trade, but meme coins may face sudden liquidity shortages if the hype dies down or early investors cash out. A token with low liquidity can lead to slippage, meaning you might end up paying more or selling for less than expected.
One key thing to look for is whether the project has a locked liquidity pool—this ensures that the developers can’t pull the funds (also known as a rug pull) and run off with your money. Always check the liquidity levels before diving in, and remember, not every meme coin makes it to the moon!
