💧Liquidity Health

ApeSwap aims to become a thought leader in standardizing best practices for liquidity health, tokenomics, and treasury diversification, while breaking down the complexities for easy public consumption and creating the first ever industry-wide credentialing system. The tools that ApeSwap has worked to create have been built around three core values: objectivity, uniformity, and ease of use; starting with a laser focus on liquidity as a key concept for users and projects to understand, and expanding from there.

In pursuit of those values, ApeSwap has created new opportunities for users and projects to evaluate crypto assets for themselves through the Liquidity Health Dashboard.

How the Liquidity Health Dashboard Works

The Liquidity Health Dashboard (or "LHD") synthesizes liquidity data from over 1500 crypto projects around the world to provide a metric by which users can assess the status of a project's liquidity: their Liquidity Health Score. The Liquidity Health Score is designed to be consistent (in that it can be used to compare projects of all shapes and sizes), objective (in that it is not inherently biased towards or away from any particular characteristics of a crypto project), and accurate (in that the data used to create it is pulled directly from the blockchain or reputable, up-to-date sources).

The formula that dictates the Liquidity Health Score consists of three primary factors: Liquidity Strength, Liquidity Ownership, and Liquidity Concentration. Each score is measured on a scale of 0-100, with 0 representing the weakest score and 100 representing the strongest.

Finally, we take a weighted average of the three individual scores to provide an overall score for the token: their Liquidity Health Score.

For a detailed breakdown of how the Liquidity Health Score is calculated, visit the Methodology page:

pageDashboard Methodology

For a comprehensive list of the terms used in relation to the LHD, visit the LHD Glossary & Tags page:

pageLHD Glossary & Tags

How to Use the Liquidity Health Dashboard

If you are new to the concept of liquidity and liquidity health, the Liquidity Health Dashboard is a great place to start, because it provides at-a-glance, digestible information about whether a particular project is maintaining the quantity and quality of liquidity that it needs for its token in order to survive in the intermediate and long term. It is important to understand that the Liquidity Health Dashboard is not designed to tell you what tokens to buy. As always, ApeSwap does not and will never provide financial advice! Instead, It gives users and projects a way to evaluate long term project and token health, and is most useful when combined with other independent research about a project.

With that said, scores from the Liquidity Health Dashboard can help guide your research in the right direction - think of them as risk ratings, where a lower score means the token is likely more risky to hold, and a higher score means the project is likely more stable and sustainable.

With the Liquidity Health Dashboard, users are now able to access and act on liquidity information about crypto projects that have been hiding in plain sight on the blockchain. The LHD will allow users to more fully understand whether their favorite project has been making liquidity decisions for their token that align with the best long-term interests of the project’s users and token holders as well as the tokenomics data they share on their site or documentation.

There are two main views to interact with when using the LHD: the List View, and the Project View.

List View

The List View shows 50 projects per page, with a summary of the following information:

• Market Cap: The current market capitalization of the token.

• 24h Change: The percentage change in the market capitalization of the token over the last 24 hours.

• Extractable: The total extractable liquidity for the token - the sum of the hard assets liquidity in all of the valid liquidity pairs for the token.

• Strength: The ratio of the available liquidity of a token to its current market capitalization.

• Ownership: The ratio between the amount of token liquidity that a project owns to the amount of liquidity that the project should own.

• Concentration: A metric that illustrates how well a project establishes deep liquidity in the pools it makes available for the token.

Project View

When you click on a specific project in the List View, you'll see a detailed breakdown for that project's liquidity in the Project View. Within the Project View, you can see the following information:

Token Info (1): Includes token price, price change over the last 24 hours, chains, market cap, and social links for the project.

Liquidity Health Score (2): Shows the project’s liquidity subscores for each category as well as the overall score, along with a Share feature (3) that allows users to share live LHD data about this project to Twitter.

Liquidity Strength Summary (4): Provides detailed liquidity information for the selected project’s token.

Token Liquidity Strength (5): Shows the token’s relative liquidity strength in terms of the Extractable Liquidity to Market Cap ratio. Users can zoom for more refined info and can hover over token logos for additional details.

Liquidity Concentration (6): Shows a list of the status of all liquidity pools/chains, the extractable liquidity held within those pools, and the block explorer links to each pool.

Liquidity Ownership (7): Shows the relative share of owned vs. non-owned liquidity for the project, along with a list of whitelisted addresses (8) for protocol-owned liquidity.