Market cap, liquidity and slippage: the three numbers to read before buying a meme coin
Market cap is price times supply: the token's size. Liquidity is the money in the trading pool: how much you can buy or sell without moving the price. Slippage is the difference between the quoted price and what you actually get. On a $10,000 pool a $1,000 buy gets about 17% fewer tokens than the quote.
Market cap
Market cap = price x circulating supply. A pump.fun token has one billion tokens, so a price of $0.0001 means a $100,000 market cap. Market cap is how traders compare tokens and set targets: "it's at $100k, the last one like it went to $5M".
FDV (fully diluted valuation) is price x maximum supply. For pump.fun tokens the two are the same. For tokens with locked or future supply, FDV can be many times the market cap, and unlocks can push the price down.
Liquidity
Liquidity is the money sitting in the pool you trade against, usually half SOL and half the token. A token can have a $1M market cap and only $20,000 of liquidity: on paper it is worth a million, in practice only a fraction can be sold before the price collapses. That is why our filter rejects tokens with less than $10,000 of liquidity.
Slippage
Slippage is the gap between the price you see and the price you get. In a standard pool the price moves along a curve as you buy, so a larger buy relative to the pool pays more on average. The table shows how many fewer tokens you receive than at the quoted price:
| $100 | $500 | $1,000 | $5,000 | |
|---|---|---|---|---|
| Pool $10k | 2% | 9.1% | 16.7% | 50% |
| Pool $50k | 0.4% | 2% | 3.8% | 16.7% |
| Pool $250k | 0.1% | 0.4% | 0.8% | 3.8% |
| Pool $1M | 0% | 0.1% | 0.2% | 1% |
Selling costs the same again on the way out. A $1,000 round trip in a $10k pool loses roughly a third of the money before the price has even moved.
Slippage tolerance
Swap apps let you set a slippage tolerance: the most you accept. Too low and your trade fails in a fast market; too high and bots can sandwich your order (buy just before you and sell just after). For meme coins, keep it at a level you could live with as the full cost, and size the trade to the pool.
Read all three together
- Market cap tells you how much room is left. A $50k token can do 20x; a $500M token rarely does.
- Liquidity tells you whether you can get out. Aim for at least $10k, more for bigger trades.
- Slippage tells you what the trade costs. Keep each buy below about 2% of the pool's liquidity.
Next: how to trade meme coins, or the checks in how to spot a rug pull.
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Request accessNot financial advice. Numbers are measurements of past tokens and calls; meme coins are extremely risky and most go to zero.