I first truly understood "liquidity" during a small sell-off.

That day, I was staring at the chart, and the trend looked perfectly normal—stable prices, gentle candlesticks, steady market sentiment. Honestly, I was a bit confused. Since the chart looked so healthy, why were people around me starting to get nervous?

I decided to give it a try and sold a small portion of my position.

The moment the trade executed, my perception was shattered.

The price didn't slowly slide down; it dropped straight away. It felt like standing on seemingly solid ground, and in the next second, I heard a "crack," and I sank downward.

In that instant, I realized a fact: **Price is just a label in the display window; liquidity is the actual inventory behind the shelves.** You can see the price tag, but whether you can actually sell depends on whether there are buyers behind it and whether there's enough depth.

This principle is especially critical in DeFi lending protocols.

Collateral isn't just a pretty number on paper; it's the real foundation supporting the entire lending ecosystem, minting mechanisms, liquidation logic, and debt system operation. On the surface, those collaterals seem very safe. But once the market thins out and trading depth becomes insufficient, this "sense of security" can collapse instantly under pressure.

In fact, the essence of "market depth" is simple: it answers a question—**How much can you sell at most before a significant price fluctuation?**

Imagine two pools—one deep pool where jumping around doesn't cause big waves; another shallow pool where a gentle splash causes the entire surface to ripple.

Liquidity is that depth. And the safety of collateral ultimately depends on whether this depth is sufficient.