What is Market Cap?
Market Cap (or Market Capitalization) is the total value of a token in circulation.
It’s calculated by multiplying the token price by the total supply.
Formula: Market Cap = Token Price × Total Supply
What is Liquidity?
Liquidity refers to how easily tokens can be bought or sold without causing big price changes. Higher liquidity means smoother trades and more stable prices.
What is Total Supply?
Total Supply is the number of tokens that exist or are in circulation.
It affects token price because:
Token Price = Market Cap ÷ Total Supply
How They Work Together
- Buying increases Market Cap and Liquidity.
- Selling decreases both.
- Changing Supply affects price directly (if Market Cap stays the same).
Example Simulation
If someone buys $100 worth of tokens:
- Market Cap increases by $100
- Liquidity increases by ~$90 (after fees)
- Token Price goes up if Supply stays constant
Play with values on the homepage to see how these elements react to each other!