Liquidity

USDC is one of the most liquid assets in crypto. You can convert it to other cryptocurrencies or fiat currency on virtually any exchange with minimal price impact, even for large amounts.

In DeFi, liquidity has a specific meaning. Liquidity providers deposit token pairs into pools (like USDC/ETH) that traders swap against. In return, LPs earn a share of trading fees. This is how decentralized exchanges like Uniswap work.

High liquidity matters because it means tighter spreads (less cost to trade) and less slippage (less price movement when you trade). USDC's deep liquidity across exchanges and DeFi protocols is one of its key advantages.