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Imagine you have two pigments that you want to mix to get a nice color. If you try it mix them dry it wont be easy and the result will be quite bad, but with just a little bit of water those compounds can easily be dissolved and mix together nicely.
Now, life needs a whole bunch of substances to be constantly mixing and reacting with each other, and so it need a solvent. As to why water specifically? Well it’s largely available on earth and it can dissolve *a lot* of stuff, so you know, life “found a way” to use it.
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