Simulate value of custom crypto coin?

1 pointssanjogg1y ago2 comments

Is there a way to simulate the value of a new crypto coin. I'd like to understand how the value changes with buys and sells. If there is other sources of information which would help me in understanding this, please let me know!

Thanks!

2 comments

mouse_1y ago

tl;dr it's different for each coin

The valuation of different assets is calculated completely differently. Bitcoin's value is determined by the market rate, the most recent real buy/sell price. For defi coins (ETH, BNB, Solana coins) on decentralized exchanges, this is determined automatically (thus the term (automatic market maker). In this case, the liquidity behind the coin is the driving factor. The liquidity is the total amount of money in the coin. If the liquidity of the coin is $10 and someone buys $5, then the price is going to skyrocket. If the liquidity is $1,000 and someone buys $5, the price will not change much. In the case of automatic market makers, market cap is not nearly as important a metric as liquidity.

sanjoggOP1y ago

Thank you, that gives me a pretty good idea. I have a few follow up questions If you don't mind:

1. So what will be the value of a defi coin as soon as you create it? 2. Based on what you said, if the liquidity of the coin is $10, and I buy $10 worth of the coin - the value will now be $20?

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