What Is the Concept of “Deep Liquidity” and Why Is It Desirable for Price Stability?

Deep liquidity refers to a market where there are large amounts of assets available for trading without significantly impacting the asset's price. It is desirable because it absorbs large buy or sell orders with minimal slippage.

This stability makes the market highly resistant to price manipulation, as an attacker would require an enormous amount of capital to cause a meaningful price deviation. Oracles that source from deep liquidity pools are inherently more secure.