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Explanation on Liquidity Pools on DeFi Exchanges like Pancakeswap

Binance

Cryptocoins Exchanges / Binance 542 Views

I've created a token on the Binance Smart Chain, and something is incredibly confusing to me. I've learnt that when someone buys your token it comes from your liquidity pool, and the BNB they used to buy the token will be put into the liquidity pool in exchange for the token. I also know that a token's price is determined by BNB/Token in the liquidity pool. My token has increased to a price of 3 cents, and one of the holders has 400k of these tokens, and they bought it using around 200 hundred dollars. When you do the math, if that person were to sell they should make around 14k dollars, but there is only 2.7 BNB in the liquidity pool. Is this how a token is suppose to work? If the person sells they cannot get the amount that it says they can get. If that person were to sell they would take all of the BNB in the liquidity pool, but what about the rest of the people? Will they not be able to sell now as there's no BNB to give out? Do I have to top-off the liquidity pool myself? I am really confused.

submitted by /u/Serra-X
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