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DEX Pool Token Acquisition Cost

Overview

DEX Pool Token Acquisition Cost tracks the weighted average acquisition price of tokens held within decentralized exchange pool contracts, treating these pools as trading entities. This metric focuses specifically on the cost basis of tokens accumulated through actual swap activities, providing insights into DEX trading dynamics independent of peer-to-peer transfers.

Definition

This indicator calculates the weighted average price at which tokens have been acquired by DEX pool contracts through swap transactions, effectively measuring the average cost basis of tokens that have flowed into these pools through market operations.

Significance

  • True Market Price Discovery: Reflects acquisition costs from actual market trades only
  • Swap-Based Price Reference: Provides a trading-only cost basis unaffected by transfers
  • DEX Market Dynamics: Offers insights into how DEX mechanisms are acquiring tokens
  • Actual Trading Benchmark: Shows a more active market-based price foundation

Calculation Method

The indicator processes: 1. Identified DEX pool contracts holding the token 2. Only token acquisitions through swap transactions (excluding direct transfers) 3. Weighted average price based on quantity acquired through swaps

Interpretation

  • Comparison with Total Average Cost: Differences highlight the impact of non-swap transactions
  • Market Efficiency Assessment: Closer alignment with current prices suggests efficient markets
  • Trading vs. Holding Analysis: Helps distinguish between trading and holding price impacts
  • Liquidity Dynamics: Provides insights into how tokens are being priced through actual market mechanisms

Analysis Applications

  • Pure Trading Analysis: Focus specifically on market trading price formation
  • Market Efficiency Evaluation: Compare swap-based costs with transfer-based costs
  • DEX Price Impact Assessment: Understand how DEX trading affects token pricing
  • Technical Analysis Reference: Use as a more reliable basis for support/resistance than total average cost

Considerations

  • Different DEX models (constant product, stable, concentrated) may show varying acquisition patterns
  • Flash loans and arbitrage activities can influence the metric
  • Smart contract interactions like yield farming may create non-standard swap patterns
  • Primarily reflects market buy pressure rather than overall holder sentiment

Parameters

This indicator uses the base parameters for time range and resolution settings.