Liquidity
Financial capacity to act with speed. The key metric of capitalism is the liquidity of the market.
Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. Cash is the most liquid of assets, while tangible items are less liquid. The two main types of liquidity include market liquidity and accounting liquidity. Current, quick, and cash ratios are most commonly used to measure liquidity.
The promise of crypto currencies is greater/fairer liquidity for all.
Cash
Through labour and machine, money in whatever form provides energy to commit to a project.
Cash is the bank is the easiest measure of success. But it lacks soul.
How does crytpo change this picture?
DeFi
Solutions
Measuring Liquidity
Financial analysts look at a firm's ability to use liquid assets to cover its short-term obligations. Generally, when using these formulas, a ratio greater than one is desirable.
| Measure | Crypto |
|---|---|
| Current Ratio | |
| Acid Test Ratio | |
| Cash Ratio |