> ## Documentation Index
> Fetch the complete documentation index at: https://docs.fx.meme/llms.txt
> Use this file to discover all available pages before exploring further.
# Liquidity, price, and the triangle
> Understand what supports a quote, what locked liquidity means, and how currency prices connect.
A pool price tells you the exchange rate at the pool's current state. Liquidity determines how that rate changes when someone trades.
On FX, the same token has two currency markets. Each has its own inventory and price, connected through the underlying currency market.
## Liquidity has a location
FX uses Uniswap v4 pools, where liquidity belongs to price ranges. A position contributes active liquidity while the market is inside its range. Two pools with the same total value can have different depth around their current prices. [Uniswap's liquidity overview](https://developers.uniswap.org/docs/liquidity/overview) explains this range model.
That distinction matters when comparing a displayed liquidity figure with an executable quote:
| Quantity | What it tells you |
| -------------------- | ----------------------------------------------------------------- |
| Pool price | The exchange rate at the current pool state |
| Total pool principal | The inventories held across the pool's liquidity positions |
| Active liquidity | The liquidity contributing at the current price |
| Execution quote | The result of a particular amount moving through particular pools |
A pool's total principal is not a maximum order size. The amount you can exchange depends on direction, available ranges, fees, and the limits on your transaction.
## What locked liquidity means on FX
At launch, the canonical position is seeded with the allocated token supply. FX's position contract has no principal-withdrawal function. Its fee-harvesting path can reinvest earned fees into that position.
The lock applies to custody of the canonical position. It does not fix its inventories: buys move currency into the pool and tokens out; sells move them in the other direction.
It also does not fix a token's price or guarantee that every order size can fill. A starting valuation sets an initial price; it does not place an equivalent amount of stablecoins behind the supply.
When evaluating a trade, use a fresh quote for the amount and currency you intend to exchange. Read the liquidity figure as context for that quote.
## How the two prices connect
Suppose the euro-side token price is 0.01 EURC and the underlying currency market exchanges one EURC for 1.10 USDC.
```text theme={null}
0.01 EURC per TOKEN × 1.10 USDC per EURC
= 0.011 USDC per TOKEN
```
This is the implied dollar-side price before trading costs. If the TOKEN/USDC pool offers a different price, a trader may be able to exchange through the triangle.
A price difference alone does not establish a profitable route. Every leg has fees, the trade moves prices, and execution requires enough liquidity.
## When the currency relationship moves
If EURC rises from 1.10 to 1.20 USDC while the token's euro-side price stays at 0.01 EURC, its implied dollar-side price becomes 0.012 USDC.
That is a conditional comparison. Neither token pool automatically resets to the calculated value. Trading can bring the markets closer together; costs and available liquidity can leave a gap.
The token remains the same ERC-20 asset throughout. Pair membership does not promise a fixed currency exposure or exchange-rate return.
## Read the whole route
A direct TOKEN/USDC quote depends on that pool. A USDC → EURC → TOKEN quote also depends on the connecting currency pool and the token's euro pool.
The trade panel's selected-pool liquidity can therefore describe a different pool from the router's preferred path. Check the route alongside the liquidity label.
Compare complete outputs and calculate transaction limits.
Understand chart prices, volume, and valuation.