This pool has very low liquidity and prices may differ drastically. what is it ?
Low Liquidity Pool Risks.
Humphrey Ikhayere
This pool has very low liquidity and prices may differ drastically
Low liquidity in a pool can result in wider bid-ask spreads, which means that there may be a significant difference between the price at which a buyer is willing to purchase an asset and the price at which a seller is willing to sell it. This can result in prices that differ drastically from the prevailing market rate for that asset.
If you are considering trading in a pool with low liquidity, it is important to carefully evaluate the prices being offered and to be aware of the potential risks involved. You may want to consider placing limit orders rather than market orders, which can help you avoid overpaying or underselling.
Additionally, it's a good idea to monitor the liquidity of the pool over time and adjust your trading strategies accordingly. As the liquidity of the pool improves, you may be able to obtain better prices and execute trades more efficiently.
Humphrey Ikhayere
Explain it in layman terms
Low liquidity in a pool means that there are not many buyers and sellers for the assets being traded in that pool. When there is low liquidity, the prices that buyers and sellers are willing to buy or sell at may be very different from the current market rate for that asset. This means that if you are buying or selling in this pool, you might end up paying or receiving a much higher or lower price than you would in a more liquid pool.
To avoid this, it's important to carefully evaluate the prices being offered and use limit orders to make sure you get the best price possible. As the pool becomes more liquid, you may be able to get better prices and make trades more easily.