PumpaNomics

What is PumpaNomics?

PumpaNomics is a tool that helps you calculate how much new capital is needed for a token's price to double (2x, 5x, 10x, or even 100x). Simply enter the token address, and PumpaNomics will use the constant product formula, combined with liquidity across all on-chain pools, to calculate the price change.

How Does PumpaNomics Work?

PumpaNomics uses the constant product formula, which is the basis for many decentralized exchanges like Uniswap V2 and its forks. It works like this:

1. Liquidity Pools: A pool contains two tokens, each representing half of the total liquidity value.
2. Constant Product: The product of the quantities of the two tokens always remains constant: k = x * y.
3. Price Impact: Adding one token to the pool (buy pressure) increases x and decreases y to maintain the constant k.
4. Price Calculation: The price is determined by the ratio of the two tokens: Price = y / x.
5. Price Increase: As x increases and y decreases, the price of the token being bought increases.

PumpaNomics considers the liquidity across all on-chain pools and incorporates factors like arbitrage and market depth for more accurate results.

Understanding PumpaNomics Results

The calculator shows how injecting capital into the liquidity pool affects the token price. The results are displayed both as a percentage increase and in terms of "X" times increase.

Limitations:

• Data from centralized exchanges is not included in the calculations.
• The model does not consider potential liquidity on other blockchain networks.
• The model assumes no selling pressure during the liquidity injection, predicting price change as if the full amount was added without concurrent selling activity.

What is PumpaNomics?

PumpaNomics is a tool that calculates the amount of capital required to increase the price of a token. Simply enter the token address to see how much capital is needed to pump the token price by 2x, 5x, 10x, or even 100x.

PumpaNomics Features

• Calculates the capital required for price increases: PumpaNomics can calculate the capital infusion needed to push a token's price to a specific target, such as 2x, 5x, or 10x.
• Supports multiple tokens: PumpaNomics supports a wide range of tokens; simply enter the token address to use it.
• Considers all on-chain liquidity: PumpaNomics utilizes the combined liquidity of all on-chain pools for its calculations, providing more accurate results.

PumpaNomics Benefits

• Ease of use: Simply input the token address to get results.
• Accurate results: PumpaNomics uses the constant product formula and all on-chain liquidity data for its calculations, delivering accurate results.
• Insights: PumpaNomics helps you understand the impact of liquidity on token prices and the non-linear nature of price changes.

How PumpaNomics Works

PumpaNomics utilizes the constant product formula, which underpins many decentralized exchanges like Uniswap V2 and its forks. Here's how it works:

1. Liquidity pools: Liquidity pools contain two tokens, each representing half of the total liquidity value.
2. Constant product: The product of the quantities of the two tokens always remains constant: k = x * y.
3. Price impact: Adding one token to the pool (buying pressure) increases x and decreases y to maintain the constant k.
4. Price calculation: The price is determined by the ratio of the two tokens: Price = y / x.
5. Price increase: As x increases and y decreases, the price of the token being bought increases.

PumpaNomics Accuracy

For more realistic results, PumpaNomics uses the combined liquidity of all on-chain pools in its calculations and considers factors like arbitrage and market depth.

Key Insights

The constant product formula exhibits a quadratic relationship between liquidity and price. Doubling the liquidity (a 100% increase) results in a 4x price increase. This quadratic nature means price changes are more significant than in a linear relationship. Here's why:

• Initial state: x = y = √k
• After doubling x: new_x = 2√k, new_y = k/(2√k) = √k/2
• New price ratio: (√k/2) / (2√k) = 1/4 of the original ratio

This means the price of the token being bought is now 4 times higher.

Understanding the Results

The calculator shows how injecting capital into the liquidity pool affects the token price. Results are displayed as both percentage increase and "X" times increase.

Percentage vs. Times:

• A 200% increase means the original value has tripled (3x). This is calculated as: Original Value + 200% of Original Value = 3 * Original Value.
• Similarly, a 100% increase is 2x, a 300% increase is 4x, and so on.
• The "times" increase is always 1 more than the percentage increase divided by 100.

Limitations

• Data from centralized exchanges is not included in the calculation.
• The model doesn't account for potential liquidity on other blockchain networks.
• The model assumes no selling pressure during liquidity injection and predicts price changes based on the entire amount being added without simultaneous selling activity.