An instrument is as liquid as the participants believe it to be. If more participants believe that an instrument is liquid and evince buying interest, it “becomes” liquid. While the product design, trading systems, regulatory dispensations, etc. do have an impact on the liquidity of an instrument, more importantly, it is the activity by the participants that makes the instrument liquid.
All it requires is a few participants taking the first step. While we have certain market segments which boast of sizeable trading volume and wider participation, there is a significant skewness in other market segments. It is everybody’s interest that we make the markets broad and deep.