Concepts
Liquidity depth
How much size a pool can absorb near its quoted price before that price moves.
A quoted price only holds for a certain amount of size. Depth measures how much liquidity sits within a tolerance band — the product's convention is ±10bp — of that quoted price. Two pools can show the same headline price with very different depth, and the shallower one isn't a warning so much as a different kind of state: it simply means fewer reads, and less capital, have confirmed that price recently.
The ±10bp convention
±10bp shows up in more than one place for a reason — it's the same tolerance band behind Topology's "Depth band" metric ("combined liquidity within ±10bp of reference") and the per-pool "Depth ±10bp" row in the node inspector. Using one consistent band across the product means a depth figure from one surface is directly comparable to a depth figure from another, rather than each panel quietly defining its own notion of "near."
Depth vs. price: two different questions
A tight price with shallow depth and a wide price with deep liquidity are both real, different situations, and neither is strictly better — they're answers to different questions. Tight-and-shallow says: the last read agreed closely, but not much has been confirmed behind it. Wide-and-deep says: there's real disagreement, but it's backed by size, not just a stale quote nobody's touched.
This is also why State.OS treats "thin" as its own state label rather than folding it into dispersion — an asset can be thin and tightly priced at the same time, which a dispersion number alone would never surface.