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I've released a few BEP-20 tokens so far and some of them have been quite successful at launch but then suffer from lack of perpetual marketing, my team and I are dealing with this challenge.

However, I noticed that within a few mins after launch, my liquidity pool dries up with my token which of course drives the price up but since I usually put all of my circulating supply into the LP, I'm curious what are the consequences to having such low liquidity at ATH and what other strategies can be used that are advantageous?

Let's take the latest token for example:

  • 1000 total supply

  • 500 burned pre launch (500 remaining in circulating supply)

  • 500 added to LP with 5 BNB (50% of supply is in LP)

Within less than a min after launch, the supply in the LP drops to under 4%.

This worries me because if people were to continue buying, they eventually wouldn't have anymore liquidity in the LP and there would only be BNBs to cash out...

What am I missing?

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This case is very common for new tokens since there are tons of sniping bots that would do the instant buying automatically thus driving the price, then they will sell the tokens for profit.

a common solution to this is to add a liquidity fee for your token, where you take a portion of all transfers to add it to the liquidity (or do anything that would serve the continuation of your token viability). You can also add a mechanism for the users to get back their fees after a certain time if your token becomes stable and incentivizing the continuous usage of your token.

Other than this, it comes down to marketing and nature of your token.

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  • Thank you so much for the insight. How about adding your liquidity in portions instead of a single pool? to continue with the example above, what if I would've added 200 to the LP instead of 500 and left the other 300 to add later on? Jul 6 at 1:14
  • I don't know exactly if that would go well with the token holders, but if it works as a strategy then that's okay. Jul 6 at 10:57

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