A pool has two sides. Traders habitually treat the second one as a unit of account and stop thinking about it, which works right up until the quote asset does something.
Against a dollar stablecoin
The simplest case, and the one where the price reads as a price. Even here the specific stablecoin is information: it names a counterparty. Different issuers carry different reserve structures and different regulatory footing, and a chain quoting primarily in a stablecoin issued by the chain’s own operator — as described in what is Robinhood Chain — concentrates two exposures in one party rather than spreading them across two.
Against the gas asset
Now the quote is itself volatile, and the pair prices a ratio rather than a value. A token can rise against ETH while falling in dollars, and a chart of the pair will show you only the first.
This also changes the provider’s position in the way described in impermanent loss: when both sides move, the rebalancing works differently than it does against a stable side. So the depth in a volatile-quoted pool behaves differently under stress from depth in a stable-quoted one, even at the same size.
Against another token
The thinnest case and usually the least useful. Both sides are volatile, both can be illiquid, and to get to dollars you need a further hop — which means a second lot of price impact that does not appear in the pool you were looking at.
A token whose only meaningful depth is against another thin token has an exit that is two problems long, and quoting its liquidity from that single pool overstates it substantially.
The practical rule
Read the pair, not the token, and price your exit in the asset you actually want to end up holding. Depth against a volatile or thin quote is not equivalent to the same depth against a dollar, and totalling them into one liquidity figure hides exactly the difference that matters.
It is the same discipline as everywhere else in this series: the number is fine, the question is what it is a number about. The NoVo Crypto Market Map classifies quote assets per network before it ranks anything, for that reason.