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Tokenomics

Liquidity Pool (LP)

A smart-contract-held reserve of two assets that enables AMM trading. Pool depth determines price impact: shallow pools move more per trade than deep ones. The liquidity-to-MC ratio below roughly 5% is structurally thin — large sells move price dramatically and the depth visible on the chart may not be available at execution.

See also
Tokenomics LP Token A token representing a share of an AMM liquidity pool. Burning LP tokens permanently locks the pool, eliminating the hard rug attack vector. Pump.fun automatically burns LP tokens at graduation — this is the protocol default, not a developer virtue signal. → Tokenomics AMM (Automated Market Maker) A decentralized exchange mechanism that prices assets algorithmically based on the ratio of reserves in a liquidity pool rather than an order book. PumpSwap, Raydium, Meteora, and Orca are the primary Solana memecoin AMMs. → Tools Slippage The maximum percentage deviation between the expected and actual execution price. Too tight causes failed transactions; too loose invites price extraction. Sell slippage matters more than buy slippage — a failed sell during a dump is catastrophic, while a missed entry is merely annoying. →
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