# LP Farming

Liquidity refers to how easily $MCOS can be converted into ADA. A low liquidity level means that the market is volatile, making it easier for a few individuals to manipulate prices. Therefore, we see the need to maintain a high liquidity rate that can produce several advantages (\*):

* High liquidity and high trading activities are more likely to facilitate an equilibrium price that is acceptable to most people.
* High liquidity ensures $MCOS’s price is stable enough to withstand large orders.
* High liquidity allows for greater accuracy in technical analysis since price and chart formation is more refined and precise in a liquid market.

In order to achieve the aforementioned liquidity rate, we will reserve 5% for LP farming rewards to incentivize our liquidity providers.

Source:

*(\*):* [*https://b2broker.com/news/cryptocurrency-liquidity-and-finding-the-best-liquidity-provider/*](https://b2broker.com/news/cryptocurrency-liquidity-and-finding-the-best-liquidity-provider/)


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