Definition ∞ A liquidity event is an occurrence that transforms illiquid assets into easily tradable ones. In the context of digital assets, this typically involves actions such as a token being listed on a major exchange, a project achieving significant trading volume, or the creation of robust liquidity pools in decentralized finance. It represents a point where asset holders can readily convert their holdings into cash or other digital assets without causing substantial price distortion. Such events are critical for investor realization of value.
Context ∞ Crypto news often reports on liquidity events as moments that can significantly impact an asset’s market valuation and investor confidence. For startup projects, achieving a strong liquidity event is a primary objective, signaling progress and stability. The absence of sufficient liquidity can deter investment and limit an asset’s utility, making its creation a frequent topic of market analysis.
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