A large market cap resting on a small pool means the valuation is mostly notional. The liquidity-to-market-cap ratio is how you measure that.
Market cap is price multiplied by supply. It is arithmetic, not an appraisal — it describes what the token would be worth if every unit could be sold at the current price, which is never true.
Dividing pool liquidity by market cap gives a sense of how much of that valuation is actually backed by tradeable capital. A $10,000,000 market cap on a $50,000 pool has a ratio of 0.5%.
A low ratio means the price is easy to move in both directions. It takes very little capital to lift a thin pool, which is what produces headline percentage gains on tokens nobody can actually exit.
It also means the market cap figure overstates what could be realised. Selling any meaningful fraction of supply into a pool that small would collapse the price long before the position cleared.
There is no single good ratio, because what counts as normal falls sharply as a token grows. Across the tokens covered on this site, the median ratio is around 30% below a $250,000 market cap, 5% between $1m and $5m, and under 2% above $5m. Two percent is alarming on a small token and unremarkable on a large one, so a ratio is only readable against the size it belongs to.
The ratio stops being informative at very small market caps. On a $30,000 token, a healthy-looking 25% ratio still means only $7,500 of liquidity. Below roughly $100,000 of market cap, absolute depth is the meaningful measure and the ratio should be ignored.
It stops being informative at the top end too. Wrapped and bridged assets hold most of their depth on centralised venues or in a redemption contract, so a single pool holding a fraction of a percent of market cap is normal rather than alarming — which is why this site does not score the ratio above a $2bn market cap.
This is the actual curve used to score liquidity vs market cap on every token page and in the risk tool. Scores run 0 to 100, where higher means more risk.
| Measured value | Band | Component score |
|---|---|---|
| 0.5% | Severe | 100/100 |
| 2% | Severe | 85/100 |
| 5% | Elevated | 65/100 |
| 10% | Moderate | 40/100 |
| 25% | Low | 15/100 |
| 50% | Low | 5/100 |
This component is disabled below a $100,000 market cap. Testing against a token this site had already published on, a 47% ratio scored as low risk purely because its market cap was $28,000 — a flattering ratio against a meaningless denominator.
Nothing here is financial advice. A low score means the measurable indicators look unremarkable; it does not mean a token is safe. See how this site works.