Liquidity refers to how quickly an asset or security can be converted into cash without affecting its market price. Cash is the most liquid of assets. Property is usually an illiquid asset. It can still have a very high value but is simply difficult to sell quickly.
Think of liquidity as cash deposits in a bank: the more an organization has the stronger that organization.
In crypto terms, people become investors and ‘stake’ their crypto by locking it up with an organization or network for a certain period of time. The more crypto that is staked, the more liquid the organization or network.