Token Launch Answers
For educational and illustrative purposes only. Not financial, investment, or legal advice.
The most common questions about AMM liquidity, token launches, and DeFi pool sizing. Real concepts, no fabricated benchmarks.
How much liquidity do I need to launch a token?
The right amount depends on your expected trade size and price impact tolerance: there is no universal figure. A useful framing: if you expect average trades of $1,000, you need enough liquidity so that a single trade does not move the price by more than you are comfortable with. Use the simulator to model your specific target price, supply allocation, and expected trade sizes: it will show you exactly how your pool behaves under different liquidity depths.
What is the 70/30 liquidity split?
The 70/30 split is a launch capital heuristic where 70% of your budget goes to liquidity and 30% goes to token acquisition: buying your own token from the pool after launch to establish price momentum and signal demand. It is not a universal rule. Projects with strong pre-launch community distribution may do fine with different ratios. The Token Launch Simulator lets you test different capital allocations and see how they affect your price stability and slippage profile.
What is price impact and why does it matter at launch?
Price impact is the change in token price caused by a single trade. On AMMs like Uniswap, every buy moves the price up and every sell moves it down. At launch with thin liquidity, a $5,000 buy can move the price by 10% or more. High price impact deters serious buyers and invites snipers. The simulator shows you exactly how much each trade size will move your price given your liquidity depth.
What is a constant product AMM?
A constant product AMM (automated market maker) uses the formula x × y = k, where x and y are the reserves of two tokens and k is a constant. When someone buys token A, they add token B to the pool, reducing A's supply and increasing its price. Uniswap v2, most Raydium pools, and many other DEXs use this model. The Token Launch Simulator is built on the constant product formula.
How do I calculate my token's starting price?
Starting price = liquidity (in USD) ÷ (token supply in pool × 2). If you add $10,000 of liquidity paired against 1,000,000 tokens, your starting price is $10,000 ÷ 2,000,000 = $0.005. The simulator lets you set your target starting price and calculates how much liquidity you need to achieve it at any given supply allocation.
What is FDV and how does it affect my launch?
FDV (Fully Diluted Valuation) is the market cap if all tokens were in circulation at the current price. FDV = total supply × current price. Sophisticated buyers compare FDV to real liquidity: if FDV is $50M but liquidity is $50,000, the ratio is 1000:1, which signals extreme fragility. A very low liquidity-to-FDV ratio is a common warning sign for experienced buyers. Use the simulator to model how your liquidity holds up against your target FDV and expected trade sizes.
What happens when a whale buys at launch?
A large buy moves the price up sharply on a thin pool, then attracts retail FOMO buyers at inflated prices. If the whale sells shortly after, it crashes the price for everyone who bought after them. The simulator's trade-by-trade view shows you exactly how your price moves through the first 25 trades, so you can see how vulnerable your pool is to early whale activity.
Should I launch on Ethereum, Solana, or Base?
Ethereum mainnet has the deepest liquidity and most credibility but high gas costs make small trades expensive. Solana has fast, cheap transactions and growing DeFi TVL, good for high-frequency trading scenarios. Base is EVM-compatible, cheap, and growing fast with Coinbase distribution. The right chain depends on your community, your token's use case, and your launch budget. The simulator works for any constant product AMM regardless of chain.
What is impermanent loss and should I worry about it at launch?
Impermanent loss (IL) is the difference in value between holding tokens in a liquidity pool versus just holding them. If your token price doubles, LP holders gain less than outright holders because the pool rebalances. For project-owned liquidity at launch, IL is less of a concern: you are providing liquidity as infrastructure, not for yield. What matters more is that your pool stays deep enough to support healthy trading.
What is the backwards calculator?
The backwards calculator lets you start from your goal (a target market cap, a target price, or a target raise) and work backwards to find the liquidity and supply allocation you need. Instead of guessing and simulating, you input where you want to end up and the calculator tells you how to get there.
Why would a founder target 90% or more supply ownership at launch?
The main reason is anti-sniper protection. When a new pool is created on a DEX, bots watch the mempool and immediately buy tokens at the initial pool price, then sell into organic buyers at a profit. A founder who buys a large percentage of the supply quickly pushes the price up before snipers can exit profitably, and leaves less cheap float for bots to acquire. The tradeoff is real though: a 90% ownership target means only 10% of the budget goes to pool liquidity, creating a thin pool that is more volatile for everyone. Projects that go this route often add contract-level protections too, like per-transaction buy limits or a brief launch delay, rather than relying on ownership concentration alone. Use the simulator to model what a 90/10 split looks like at your specific budget and see whether the liquidity is still workable for your expected trade sizes. Learn more in the <a href="/learn/anti-sniper-strategy">Anti-Sniper Strategy guide</a>.
Want to model these scenarios yourself? Try the Token Launch Simulator →