Liquidity

For a token to have economic value it needs a price determined by the market. This price can only emerge when there's liquidity: a trading pool where your token can be exchanged for other assets.

When the trading pool is first launched, it only contains some amount of the token you created. The pool does not contain any of the asset that your token is paired with. This means that any tokens allocated through the Reward or Merchant Allocation cannot be immediately sold. This will only be possible when the pool has been filled up with enough liquidity of the pairing asset through open market trading.

This kind of liquidity setup is also sometimes referred to as single sided liquidity or one sided liquidity. The following image shows the starting asset balances when the trading pool is first launched:

As traders start buying your token, the amount of your token in the pool goes down and the amount of the asset they paid in, for example USDC, goes up:

And as the token is traded, the balance of your token and USDC fluctuates:

Launching a liquidity pool with single sided liquidity is capital efficient, because you do not need to put up any of the pairing token when the pool is launched. It also means that your application must be valuable enough for the market to buy your token from the pool.

Metal’s Liquidity Flow

When you deploy a token through Metal:

1. We reserve a portion of the total supply for liquidity.
2. We don’t launch the pool immediately.
3. You decide when the pool goes live.

This lets you time your market entry carefully, without worrying about bots, early speculation, or thin liquidity.

How Liquidity is Allocated

The amount of your token reserved for liquidity depends on two optional configurations:

• Reward Allocation – tokens you set aside to distribute to users as rewards.
• Merchant Allocation – tokens reserved a custom address for other use cases.

Once these are allocated, the rest of the supply — between 85% to 100% — is set aside for liquidity.

Why It’s Reserved (Not Launched)

By holding liquidity until you are ready:

• You prevent premature speculation and volatility before your app is ready for it
• You can coordinate marketing, partnerships, and reward programs before launch
• You control the first impression of your token’s price and depth

When You Launch the Pool

Once you are ready to trigger the pool launch:

• The reserved tokens are paired with wrapped ETH
• A Uniswap V3 pool is created with a pre-configured price curve (in other words, we took care of the math)
• The token will be live for trading