There's an old saying: Statistics don't lie, but liars use statistics.
There are three types of lies: lies, damn lies, and statistics. - Mark Twain
I love Hive-Engine...I don't want this post to seem otherwise. They are offering data on their front ends of H-E and Tribaldex, which is great. However, I think it's important for users to approach Hive-Engine (H-E) numbers with caution.
Looking at the H-E "tokens" page reveals a list of current tokens. At the time of this writing, there are about 432 tokens listed (16 per page on my screen, times 27 screens is 432...I didn't want to count). You can see the currently live list of tokens at https://hive-engine.com/?p=tokens. They are listed by most 24 hour volume downward. Those tokens with zero 24 hour volume are listed by the order of their creation, I think, from oldest down to the newest. Currently, DEC is atop the listings. It will likely stay there for some time and with good reason due to the popularity of Splinterlands. Other "big name" Hive tokens and brands are likely atop that list and rightfully so as well.
These data are great. But, in my view, things here can be deceptive.
Glaring things
The most glaring thing to me that could be interpreted wrong is the "Market Cap" data. It seems simple enough and you might say, "Oh, that's how much this token is worth, I got it." Umm, slow down.
You can sort all the tokens by Market Cap by clicking that column. There's no doubt this is a useful metric, but...
If you clicked "Market Cap" today, you'll see things re-sorted from lowest-to-highest. Click it again and it'll go from highest-to-lowest. Right now, I see MOOBEE listed at the top of the list. The MooBees token (love the name, by the way) is listed with a market cap of $318 trillion. $318T sounds really good...far bigger than Bitcoin! 300 times bigger than Apple. This is good, right?
Understand how this "Market Cap" metric works: it's fourth grade math, maybe second grade, thus I think I get it.
Supply x closePrice = Market Cap
Here's an example of "closePrice" in action for the BEE token if you'd like to see: https://accounts.hive-engine.com/marketHistory?symbol=BEE. The top line is most recent.
In the case of MooBees above, the formula comes out as...
520,000 x 612,874,732 = $318,694,860,783,936 (with a little rounding off).
(
The PewDiePie Coin is easier to see:
1,000,000 x 4,110 = $4,110,300,000
Again, it's just the "Supply" times the closePrice (closePrice is just the price at the last transaction).
Manipulation
Of course, the two variables (supply and closePrice) can be manipulated at any time.
To manipulate the Supply: SUPPLY x closePrice = market cap
The owner of a token can issue/mint more tokens at any moment (up to the token's max). Notice the "i" by each token on Hive-Engine.com. It reveals the circulating supply and the max supply. Circulating supply is how many token have already been minted, and the max is, well, the max that can ever be minted. The token creator can mint at whim (and thus, affect the market cap of the token).
As a case study, I run the LUV token. This morning, the circulating supply was 30,000. New LUV tokens are minted to the @LUVshares account. They are released to Hive users when Hivers call the LUVbot via the !LUV command. Since the @LUVshares account was down to only around 200 LUV, it was time to mint more LUV.
Look at the market cap of LUV this morning before minting...LUV had a market cap of $615.27.
Then, I minted 4,000 more LUV.
And...by magic, the market cap of LUV appeared as $697.27. The ten seconds it took me to mint 4,000 LUV resulted in a roughly 12% increase in "market cap" for the LUV token.
Imagine if I had minted more than only 4,000. LUV has a max of 10 billion LUV. Had I minted all 10,000,000,000, then the market cap would've reported:
10,000,000,000 x 0.02051 = 205,100,000
Those numbers are silly.
To manipulate the closePrice: supply x PRICE = market cap
Anyone can buy or sell a token at any moment. This transaction price will go down as the "closePrice". That is "closePrice" will be listed on the Hive-Engine "Price" column. This is the one that gets multiplied by the Supply. (I made this tool: http://crrdlx.websavvy.work/heconverter/index.html to keep an eye on prices. It uses the closePrice as well. Look at the "About" page for details on closePrice and other H-E api data.)
This is a free and open market. Anyone can buy or sell anything, and that's certainly fine. Do your thing.
And folks do do their thing. About two weeks ago, the largest holder of the LUV token decided to sell out at any price. The closePrice took a nose dive for a couple of days. A few days later, someone decided to by a lot of LUV and the price shot upward. This is what can happen with small volume, small market tokens. It really doesn't take much money at all to yield a wild price swing in appearance. The flat red line below shows that no one was selling LUV at that time.
This can happen on larger tokens. A couple of months ago, someone bought up all of the POB tokens that were for sale. Every single one. The result was a brief, but wild, price fluctuation. POB is one of the biggest H-E tokens there is, yet still, it took a relatively small amount of money for this whale to wildly splash the price around.
Lesson...be cautious when observing H-E data and H-E token price swings.
Did you know that you can monitor who is buying and selling Hive-Engine tokens? You can. There's an old saying that goes like this..."Sunshine is the best disinfectant." That aphorism is aimed at germs and perhaps viruses, but it also applies to information. That's why there are "Sunshine Laws"...law requiring information to be released for public scrutiny. The premise is...if things are out in the the sunshine's open, there is less chance for shenanigans to take place in the dark places.
The website https://jjb777.github.io/hive-engine-classic/ looks exactly like Hive-Engine.com, but it's the "classic" version of H-E. Click "Tokens" then click a favorite token's market page (the horizontal arrows). You'll see Buy Orders, Sell Orders, and Trade History...with usernames. This is an interesting tool to monitor a token's actions. Whenever there's a wild price swing, take a look and it just might be enlightening.
Summary
- Hive-Engine is terrific. I love a free and open marketplace.
- Certain data on H-E might ought to be taken with a grain of salt.
- "Market Cap" is simply
Supply x last Price - https://jjb777.github.io/hive-engine-classic/ is a great tool to keep the sunshine shining.
- http://crrdlx.websavvy.work/heconverter/index.html is another tool to keep an eye on price in Hive and USD
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