Can you explain how a token split works in the cryptocurrency market?

1 answers

• Dec 26, 2021 · 3 years ago
  Absolutely! A token split, also known as a token subdivision, is a process in which the total supply of a cryptocurrency token is divided into smaller units. This is typically done to increase the liquidity and accessibility of the token. For example, if a token split ratio is 1:100, each token holder will receive 100 times the number of tokens they previously held. The value of each token will be adjusted proportionally to maintain the overall market capitalization of the token. Token splits are often seen as positive events as they can attract more investors and increase trading activity. However, it's important to note that a token split does not change the intrinsic value or functionality of the token, but rather adjusts the supply and price per token. It's like splitting a cake into smaller pieces - the total amount of cake remains the same, but each piece becomes smaller and more affordable.
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