People ask me all the time, why have multiple liquidity pools? Why not just have a project with liquidity all in BNB?
Have you noticed all of those bot transactions? Why would you invite them into your coin like this?
I have noticed the bot transactions. And I (we) have invited them.
There are lots of reasons for multiple liquidity pools. This is why Kitty now has liquidity pools with HOGE (provided by HOGE itself; a study will be coming from that), Saitama, Lil Squeakers, FUNDSU SAFU, SpaghettiSpill, MetaFlokiSantaDogeVillageInu (Binance), PregnantButt, and F*ckJ*nnies. Let’s go over several reasons. Maybe you’ll find you like the concept.
- Meme power.
With multiple coins connected via mutual liquidity, you have that much more meme power to work with. Is Kitty not getting traction today? Maybe Mousey will. Maybe Fundsu Safu will gain traction. And then, as those coins go up, the bots will do their thing and drag the other coins up, too.
2. Price Stability.
With multiple liquidity pools, the other side of the first point is that with big buys you will generally see a smaller sell. And with big sells you will generally see a smaller buy. Bots react instantly to big buys and sells by shuffling liquidity between pools, thereby slowing the rise or fall of a coin.
3. Joint Liquidity
This is obvious. Right? Well, maybe not as obvious. Think about this: suppose we have 30 BNB of liquidity in the Kitty-BNB pool, and 20 BNB in the PButt-BNB pool, and 10 in the Binance-BNB pool, and so on (ignore Hoge for a second, Hoge is huge, bless them). Maybe we have 100 BNB locked in these pools total. Well, then, our projects are all backed by 100 BNB. The liquidity of one project is in a very real way the liquidity of the next, thanks to the bots’ fervent desire to move BNB.
MUST. BOT. POOLS.
The bots of course make a profit on all of this. Do we lose that BNB? Yes. We do. But think of it this way: if the chart looks bad, people panic or fomo and F everything up. These mechanisms ensure that price shocks are absorbed by multiple tokens.
Think of it like the shocks on your bike or car. The same force is exerted when you fall (I am an economist not a physicist, please bear with me) whether you have shocks or not. But, with shocks, the force is distributed much more evenly and the fall is cushioned. A devastating blow without these shocks on your bike becomes just another bump in the road.
It’s kind of like that with the multiple pools.
Do you like the pools? Do you hate them? Come to one of our telegrams and talk to us about it! And pick up a bag of whichever token you want. It all helps in the long run!
t.me/HogeFinance (note: we are not officially associated with Hoge. We like them though and I think they like us.)