Questions related to the change in the price of the token have become more frequent. Typically, users are more concerned about declines than increases. However, these processes are based on a general principle. So what affects the price? Let's dive into it in this article
How the pool works
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The ratio of the two assets in the pool (USDT / NMX) is the key parameter of the swings. The price changes when users add or withdraw one of the assets, thereby changing their ratio. If people add dollars the price of NMX in relation to the dollar rises (dollars become more by 1 token). If they sell NMX they take dollars from the pool, and there are less dollars: the price of NMX to USDT falls.
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This is the point of the pool — to provide constant liquidity. Therefore, a change in price, both in the smaller or in the larger direction, is absolutely natural. DeFi allows users to be in the market for as long as they want. Anyone can join or quit farming at any time.
Market mechanisms
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The price is not determined by one person or a special body. This is a market mechanism that obeys the law of supply and demand. The more people want to buy a token, the more expensive the asset is and vice versa. Cryptocurrency is subject to high rate fluctuations - volatility, so this asset class is considered high-risk.
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The market is subject to cycles. Rapid growth is always followed by a correction. The change in the course may be associated with the general state of the market, with world news, etc. Any coin or token, from BTC to DOGE, is subject to such fluctuations. For example, BTC was adjusted from 20k to 3k - the third correction from the end, date: from 17.12.17 to 15.12.18
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As a result, the price recovered. At the moment, this situation scared many people, and they sold themselves at a loss. If an asset has fundamental value, it will grow in the long run. NMX is a utility token that provides advantages when trading on the exchange.
What is so special about exchange tokens?
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Exchange-traded tokens are linked to the main product — the exchange or even the ecosystem of products. These are not meme coins, they have a purpose. As an example: BNB, HB token, and others. NMX gives you an opportunity to participate in farming, reduce trading commissions up to 100%, build your own team and earn partner bonuses when farming.
About farming NMX
NMX farming is the distribution of NMX tokens to liquidity providers. Tokens are distributed by a smart contract in several pools. Everyone receives a reward based on their share in the pool. Nominex is a centralized exchange with the decentralized distribution of its exchange token.
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Farming NMX was launched on February 26, 2021, https://t.me/nominex_news_rus/476. To understand what is happening not only now, but also historically, let's look at the chart - similar corrections have already happened. For example, in mid-April, the price approached $8, followed by a correction. May through July we saw a gradual increase in the pool. At the end of July, another correction followed.
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Nominex is constantly evolving, it is planned to introduce lots of new features, including a brokerage program with Binance. A detailed update on this topic will be released soon.
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NMX farming is 72 years long and is a long-term project. Within a few weeks, the price may fall or rise, but the general trend is clearly visible on the chart.