Skip to main content

Initial Liquidity

Initial liquidity addition is the fundamental step to give value and tradability to a new token.

How the calculation works?​

When creating a liquidity pool, you define the ratio between your token (Token A) and the parity token (usually KLV or another token with established value, Token B). This ratio defines the initial price of the token.

Basic Formula: Token A Price (in Token B) = Token B Amount / Token A Amount

The price in dollars (USD) is derived by multiplying this result by the current price of Token B in USD.

Real Example​

Let's suppose you created a token called MYTOKEN and are going to create a pair with KLV.

  • Available MYTOKEN balance: 10,000,000
  • Available KLV balance: 50,000
  • Current KLV price: $0.003 USD

Addition Scenario: You decide to add 1,000,000 MYTOKEN and 10,000 KLV to the pool.

  1. Ratio Calculation: 10,000 KLV / 1,000,000 MYTOKEN = 0.01 This means that 1 MYTOKEN = 0.01 KLV.

  2. Initial Price Calculation (in USD): 0.01 KLV * $0.003 USD = $0.00003 USD Therefore, the initial price of 1 MYTOKEN will be $0.00003.

Note: It is crucial to ensure that the added value is sufficient to avoid high initial volatility and bot attacks. There is a minimum amount of locked tokens required by the smart contract for security.