PumpaNomics
About
PumpaNomics is a powerful tool designed for cryptocurrency enthusiasts and investors, allowing them to calculate token pump scenarios with precision. By utilizing the Constant Product Formula, it helps users understand how liquidity pool dynamics can impact token prices. This makes it an invaluable resource for those looking to navigate decentralized exchanges like Uniswap V2 and its forks.
Details
- Liquidity Pool: The tool operates on a pool containing two tokens, each representing half of the total liquidity value.
- Constant Product Formula: The product of the two token quantities remains constant (k = x * y), affecting price based on token ratios.
- Price Impact and Calculation: Adding one token increases its quantity (x) and decreases the other (y) to maintain the constant k, with price determined by the ratio of the two tokens (Price = y / x).
- PumpaNomics Accuracy: Uses combined liquidity across all on-chain pools for more realistic results, considering factors like arbitrage and market depth.
- Key Insight: Exhibits a quadratic relationship between liquidity and price, where doubling liquidity results in a 4X price increase.
- Understanding Results: Displays the effect of capital injection into a liquidity pool on the token price
