Facing Big Liquidity Removed and Big Sell Order, Can This Liquidity Mining Protocol Survive?

2021-03-30 11:00:00 · 5046 views · 6 min read

 

You might have noticed that, on some product detail pages, there are various new advanced dashboards added.

As a professional liquidity miner, you must be super excited to have these numbers - Daily Liquidity on DEX and Net Buy Amount on DEX tracked on dapp.com, as these 2 numbers are very crucial to indicate the ongoing profits of your liquidity mining assets.

 

 

Soups Finance is a new DeFi project on Binance Smart Chain that opens its liquidity mining on PancakeSwap.

 

 

We introduced Soups Finance in our last week’s #New Dapps series. Soups Finance has 3 tokens - $SOUP, $SOUPS and $SOUPB.

 


Let’s use these 2 crucial numbers - Daily Liquidity on Pancake and Net Buy Amount on DEX to have a look at Soups Finance to see whether you should take a step to join its liquidity mining.

 

 

Let’s look at $SOUP first, which is an elastic supply token that pegged $BNB.

 

 

1. $SOUP Total Supply

$SOUP (Soup Dollar) is an algorithmic token that is designed to peg its value to the Binance (BNB) token instead of a stablecoin. The logic behind this token is similar to $DIGG:

  • $SOUP price > $BNB price, $SOUP total supply increases

  • $SOUP price < $BNB price, $SOUP total supply decreases

 

So you can know from the above chart that $SOUP is experiencing a higher token price than $BNB since launched. That’s why the token supply keeps increasing. 

 

 

2. $SOUP Liquidity on Pancake

This dashboard demonstrates the liquidity of $SOUP trading pairs on PancakeSwap. The higher the liquidity, the more crypto assets are put into the $SOUP liquidity pool on PancakeSwap. So basically, high liquidity means a bullish signal.

 

 

You can see it had an increase since launch BUT experienced a sharp decline recently on 19th March

 

 

For dashboard 1 and 2, you can combine them for your trading analysis:

 

 

When $SOUP Total Supply and $SOUP Liquidity on Pancake both increase: 

  • If $SOUP Total Supply increase rate ≈ $SOUP Liquidity on Pancake increase rate, the $SOUP token price tends to go stable; 

  • If $SOUP Total Supply increase rate < $SOUP Liquidity on Pancake increase rate, the $SOUP token price is likely to go higher, and the token supply probably keeps increasing.

  • If $SOUP Total Supply increase rate > $SOUP Liquidity on Pancake increase rate, the $SOUP token price might drop back, and the token offering might end earlier than planned.

 

 

When $SOUP Total Supply increases and $SOUP Liquidity on Pancake decreases:

 

$SOUP supply could exceed the demand, so the token price will possibly drop, and the token offering might end earlier than planned, even end deflation.

 

 

So you can tell the $SOUP price might continue to drop from the above 2 charts - the 7d $SOUP Total Supply increased 2.13% BUT the $SOUP Liquidity on Pancake had a sharp decrease. Thus, the $SOUP token price might drop.

 

 

We can confirm this trend by seeing the next chart - $SOUP Net Buy Amount.

 

 

3. $SOUP Net Buy Amount

This dashboard represents $SOUP daily net purchase (= buy amount - sell amount) in decentralized exchanges. The larger the amount of $SOUP Net Buy Amount, the more $SOUP buying than selling. So if the $SOUP Net Buy Amount continues to grow, it tends to be a bullish signal. 

 

 

BUT you can see that $SOUP Net Buy Amount had a sharp decrease recently. This is a dangerous signal. Both $SOUP Liquidity Supply and $SOUP Net Buy Amount decreased. It is very likely that some major LPs removed their liquidity and dumped their positions afterwards.

 

 

Let’s use the same method to have a look at $SOUPS, the utility token for Soups Finance protocol.

 

 

1. $SOUPS Liquidity on Pancake

This dashboard shows the liquidity of $SOUPS trading pairs on PancakeSwap. The higher the liquidity, the more crypto assets are put into the $SOUPS liquidity pool. So basically, high liquidity means a bullish signal. 

 

 

BUT the same as $SOUP, you can see it had experienced a sharp decline recently on 19th March

 

 

2. $SOUPS Net Buy Amount

This dashboard represents $SOUPS daily net purchase (= buy amount - sell amount) in decentralized exchanges. The larger the amount of $SOUPS Net Buy Amount, the more $SOUPS buying than selling. So if the $SOUPS Net Buy Amount grows, it tends to be a bullish signal.

 

 

BUT the same as $SOUP, $SOUPS Net Buy Amount had a sharp decrease as well. This is a dangerous signal. Both $SOUPS Liquidity Supply and $SOUPS Net Buy Amount decreased. It is very likely that some major LPs removed their liquidity and dumped their positions afterwards.

 

 

Now you’ve learnt how to make full use of the Soups Finance data dashboard for your $SOUP and $SOUPS token trading analysis! Follow this project, monitor the real-time data changes, and prove your token analysis! 

 

 

 

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