Show HN: Pumpanomics.com (Reverse engineer uniswap V2 logic) https://ift.tt/ZUrq5Oj

Show HN: Pumpanomics.com (Reverse engineer uniswap V2 logic) This is an MVP to reverse engineer Uniswap V2 and forks logic to simulate how much a token can pump with given injection amounts ($10K - $10M). Useful tool to understand how much potential a token has regardless of market cap. How PumpaNomics Works PumpaNomics uses the Constant Product Formula, which is the basis for many decentralized exchanges like Uniswap V2 and their forks. Here's how it works: Liquidity Pool: The pool contains two tokens, each representing half of the total liquidity value. Constant Product: The product of the two token quantities always remains constant k = x * y. Price Impact: Adding one token to the pool (buy pressure) increases x and decreases y to maintain the constant k. Price Calculation: The price is determined by the ratio of the two tokens Price = y / x. Price Increase: As x increases and y decreases, the price of the token being bought rises. PumpaNomics Accuracy: For more realistic results, PumpaNomics uses combined liquidity across all onchain pools in its calculations, accounting for factors like arbitrage and market depth. Key Insight: The constant product formula exhibits a quadratic relationship between liquidity and price. Doubling the liquidity (100% increase) results in a 4X price increase. This quadratic nature means that price changes are more dramatic than linear relationships. 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 https://ift.tt/rP7IcG9 October 1, 2024 at 03:15AM