~How to buy and sell coins on the chain
Some meme coins are increasingly feeling secondary. When using a wallet, you have to look at the K-line before trading. Some wallets are not very smooth to use.
The functions of the Ouke×Waibo3 wallet product are quite rich and it is very smooth to use. If you have chain needs, I recommend you to try it.
Take TRUMP as an example. After clicking on the token, click on the details to see the number of transactions, transaction amount, and buying and selling comparison of the transaction address in each time period. It is clear at a glance.
Another good feature is price limit trading.
If you are looking at the entry timing combined with candlestick charts, shouldn’t you also include limit orders in your analysis?
1. Click on the token you are interested in and click on trade.
2. After entering, select limit trading in the exchange area at the top left.
3. You can independently set trading parameters, including buy or sell prices, quantities, slippage, effective dates, etc.
4. After setting the trading parameters, click to submit the order. The smart contract will automatically execute the buy or sell operation.
5. Trading bills can be monitored for the execution of set orders in the transaction history.
When buying coins on-chain, you must copy the contract address (CA) to make the purchase. Some hot coins may have scammers airdropping fake coins to wallets.
Many people, for convenience, directly clicked on the fake coins in their wallets to make purchases.
When the real coin goes up in value, and you bought fake coins, it’s a double blow.
~On-chain terminology explanation
Be prepared to embrace all levels beyond the secondary market. Only by embracing new things can you avoid being cut down while focusing solely on the secondary market.
First, take the first step, engage in on-chain activities steadily, and share some on-chain knowledge.
The first meme-related concept: 'Transfer from internal market to external market.'
As the name suggests, the internal market refers to the internal chip trading conducted on the token issuing platform.
At this point, the project is in the early stage, only conducting liquidity fund trading and a series of operations on specific internal platforms and personnel.
The external market refers to the early project successfully trading the required capital volume on the internal platform and successfully launching on a decentralized exchange (DEX).
At this point, the transfer from the internal market to the external market is complete, which also means that the project has officially transitioned from the preparation phase to the trading phase.
Additional knowledge point: The transfer from internal to external market requires a certain amount of transaction fees. For example, if the required funds for the internal market are 80 SOL, then when transferring to the external market, you may only receive the equivalent of 75 SOL in tokens, with the missing 5 SOL representing the transaction fee for this operation.
If there are any professional terms or vocabulary that need further explanation, feel free to leave them in the comments section. We will gradually compile and annotate them, and some errors in annotations may occur, so please point them out for mutual improvement.
~meme coin liquidity pool
Adding meme coins to the liquidity pool means adding their meme coins and corresponding assets (like SOL) to the created liquidity pool to generate trades and increase liquidity funds. The project team will set the token exchange ratio in advance through smart contracts.
It is worth noting that adding to the liquidity pool is not only for the project team; retail investors can also contribute. However, some novices, due to unfamiliarity with the mechanism of smart contracts, may face situations where some project teams withdraw liquidity and run away. Therefore, it is not recommended for those who are inexperienced to engage in adding liquidity operations at the initial stage.
Benefits of the project team adding liquidity to the pool:
1. Enhance liquidity; the more transactions there are, the less slippage, which will relatively increase the probability of successful trades.
2. Enhance market confidence; because the mechanism of smart contracts means that when the project team adds liquidity, it is equivalent to a form of implicit staking. Putting their own funds into the liquidity pool indicates strong belief in their project and sufficient confidence.
First, understand some basic knowledge points before participating with small funds; practical operation is necessary, but it should not be blind. Combine theory and practice.
~Slippage
Since most meme coins do not have their own practical applications and intrinsic value, their prices cannot be as stable as some mainstream coins in the secondary market, making them prone to sharp rises and falls.
The main reason for this volatility is the lack of liquidity causing an imbalance in buy and sell orders. Therefore, sometimes the actual transaction price may differ significantly from the price seen when placing the order. This difference is referred to as slippage.
For example, the current displayed price of the meme coin PPP is $1. Investor Xiao Niu plans to buy 10,000 PPP coins. After seeing the price, he places an order, but when he places the order, there are only 5,000 PPP coins available in the market at a price of $1. Due to the insufficient quantity of $1 PPP coins in the market, at the moment Xiao Ming places the order, to complete the purchase of 10,000 coins, the remaining 5,000 coins of his order must transact with sellers at higher prices, for instance, at a price of $1.1. Thus, the average cost of Xiao Ming buying 10,000 PPP coins is no longer the expected $1, but becomes [(5000×1)+(5000×1.1)]÷10000 = $1.05, resulting in a slippage of $0.05, which is 5%.
Compared to the secondary market, if the quantity of required coins is insufficient within your set slippage range, the entire transaction will fail due to insufficient slippage.
The formula for calculating slippage percentage is:
Actual transaction price (1.05) - Expected price (1) x 100% = Slippage percentage (5%)
