Liquidity & Liquidity Pools
The two-sided box that sets every price — LP, TVL and why locked liquidity matters.
1The box model
Picture a box with two compartments: one holds SOL, the other holds the meme token. The price is simply the ratio between the two sides. Buy the token → SOL goes in, tokens come out → price rises. Sell → the reverse. That's the whole mechanism behind every meme coin chart.
2TVL and depth
Total Value Locked (TVL) is how much value sits inside the pool. Deep pools (big memecoins) barely move on a 1 SOL buy; shallow pools (fresh launches) can double on the same buy. Depth determines how violently price reacts to every order — including yours when you try to exit.
3Two safety checks
Before buying any coin not launched from a known launchpad, check on rugcheck.xyz:
- LP locked / burned — the creator destroyed the keys to the pool, so they can't drain the SOL and leave your tokens worthless.
- Mint authority disabled — no one can print new tokens out of thin air and dump them into the pool until it's empty.
- Freeze authority disabled — nobody can freeze your tokens so you can't sell.
Learning material summarized from the free "A Complete (Meme)Coin Guide" by @spyzer — shared with full credit.