Introduction
When it comes to microcap trading, having the right tools and data can make all the difference in identifying the most promising opportunities. In decentralized finance, where the cryptocurrency market is known for its high volatility and potential for exponential gains, traders and investors need reliable insights to navigate this landscape.
DEXTools is the leading platform that offers invaluable data insights for DeFi enthusiasts and traders. It stands out as the most widely used tool for discovering and trading microcaps, making it a crucial resource for anyone looking to capitalize on the potential gains that this niche market offers. As the most used platform for trading microcaps, it provides some key data that can be used to understand when it’s a good moment to trade microcaps or not.
You can think: why DEXTools’ data? 
According to SimilarWeb metrics, DEXTools stands out as the clear leader in its niche with the highest number of monthly visits and unique users compared to competitors. By being the preferred platform for trading and charting DeFi tokens, the statistics provided by DEXTools can be considered the most reliable and insightful for understanding this rapidly evolving market.
Data to Watch
Cryptocurrency traders are always on the hunt for the next hot microcap gem that can deliver massive returns. But how can you tell when the market conditions are ideal for microcap trading?
Two key metrics on DEXTools are essential in assessing market conditions.
1. Social Updates
One of the first metrics to keep an eye on is the number of social updates within the DEXTools platform. This metric reflects the level of activity in the DeFi market, particularly regarding microcap projects. Projects pay to update their social information on DEXTools, drawing attention from the platform’s users and directing traffic to their social channels.
When the number of social updates is high, it suggests that a multitude of projects are launching daily, indicating a dynamic and active market. This influx of projects can be seen as a sign of vitality in the microcap space, creating fertile ground for traders seeking hidden gems.
2. Revenue on DEXTswap Aggregator
DEXTswap serves as the platform-based aggregator for DEXTools.
Monitoring the revenue generated by this tool is a strategic move for traders. During periods of hype and microcap frenzy, the revenue on DEXTswap tends to surge. This increase in revenue is a strong indicator of the growing interest in microcaps. When more people engage on the platform, it means that the demand for speculative trading has increased and the time is right for microcap traders to explore new investments.
Also, since the introduction of a 0.15% flat fee on Uniswap, DEXTswap revenue has seen a surge, gaining more attention from users who were searching for a new alternative.
These two metrics share an important link to $DEXT: they directly influence $DEXT buybacks and burns, which impacts token price and circulation.
How? All revenue generated by DEXTswap feeds into $DEXT buybacks from the open market. Additionally, projects pay in $DEXT for the “Update Social” service, as it is the cheapest option. $DEXT collected from both revenue streams are burned.
What numbers are we talking about? Since February the circulating supply of $DEXT is down from 102 million to 92 million today, with 10 million tokens burned in 9 months.
The Microcap Index
Buybacks and burns are tied to DEXTools usage/revenue.
So in essence, increased usage of social updates and the DEXTswap aggregator boosts $DEXT buyback/burn activity. This applies deflationary pressure on the token supply while also creating upward price momentum.
Therefore, observing a strong upward trend in the price of $DEXT, combined with a high burn rate over a sustained period, is a clear indication that the platform’s services are in high demand.
This level of engagement serves as a promising sign for microcap traders, as it suggests that opportunities may be abundant, and the potential for significant gains is substantial.
When social updates, DEXTswap revenue, and $DEXT burn rates trend positively, it suggests favorable microcap trading conditions are emerging. With altcoin mania heating up, the chances of finding overlooked gems before they explode improve.
Of course, risks are high with microcaps, so extensive due diligence is mandatory before investing. However, by analyzing DEXTools metrics, traders can identify periods where microcap fishing may be especially fruitful.
Conclusion
In summary, DEXTools offers unparalleled insight into the microcaps market by leveraging its position as the leading platform for discovering and trading small-cap tokens. Its social update metrics and DEXTswap offer a barometer for assessing market conditions and the likelihood of potential gains.
For aspiring microcap hunters, closely monitoring DEXTools statistics can help them enter periods ripe for uncovering hidden gems.
Although the risks are considerable in the microcap environment, leveraging DEXTools’ industry-leading traffic and unique tokenomics gives traders an informational advantage that can increase their chances of success. As DeFi continues its rise, staying on top of the market pulse on DEXTools should help optimize microcap trading results. In the long run, this approach could make a difference.
Useful Links:
Where can I check DEXTools burn metrics?
Here: The Burn Dashboard
Price/Earnings DEXT Valuation Sheet
Quantitative Analysis of the DEXTools Deflationary Model
Article written by Pierandrea Cecconi (@PierArmy), Project Development Blockchain Army
