Investors in the blockchain and cryptocurrency space often rely on specific metrics to evaluate their performance. One such essential metric is "Single Token Profit and Loss," a term used to describe the profit or loss generated from holding or trading a single cryptocurrency token. This analysis helps investors assess the performance of individual assets and refine their investment strategies accordingly.
Types of Single Token Profit and Loss
Time-Based Profit and Loss (7-Day/30-Day)
Time-based profit and loss calculations focus on a specific period, such as 7 or 30 days. This approach provides insights into short-term performance using two main indicators: Profit/Loss Amount and Profit/Loss Rate.
Profit/Loss Amount
- Calculation Formula:
Profit/Loss Amount = Sum of Daily Profit/Loss Within the Timeframe - Daily Profit/Loss:
Daily Profit/Loss = Sum of Profit/Loss from Each Individual Sale - Individual Sale Profit/Loss:
Profit/Loss per Sale = (Selling Price - Average Holding Price) × Quantity Sold - Average Holding Price:
This represents the average cost basis of your holdings and is calculated as:
Average Holding Price = (Total Purchase Amount + Previous Total Purchase Amount) / (Total Quantity Purchased + Quantity in Current Purchase)
In simple terms, daily profit or loss depends on the difference between the selling price and your average cost, multiplied by the quantity sold. The sum of these daily figures gives the total profit or loss for the selected period.
Profit/Loss Rate
- Calculation Formula:
Profit/Loss Rate = Profit/Loss Amount / Total Purchase Cost Within the Timeframe
This metric indicates the return relative to the invested cost over the specified period. A positive rate signifies profit, while a negative rate indicates a loss.
Example:
Suppose you hold a token for 7 days, engaging in daily buys and sells. On one day, you sell 100 tokens at $10 each, with an average holding price of $8. The profit from this sale is:
(10 - 8) × 100 = $200.
If the total profit over 7 days is $500, and the total purchase cost is $5,000, the profit rate is:
500 / 5,000 = 10%.
Account/Token Total Profit and Loss
Beyond time-based analysis, the total profit and loss provide a holistic view of your performance for a specific token or across your entire account.
Total Profit/Loss Amount
- Calculation Formula:
Total Profit/Loss Amount = Sum of All Profit/Loss Within the Statistical Range
This encompasses all buy and sell transactions from the starting point to the present.
Total Profit/Loss Rate
- Calculation Formula:
Total Profit/Loss Rate = Total Profit/Loss Amount / Total Purchase Cost
It reflects the overall return on investment for holding the token.
Example:
If you invested $10,000 in a token and earned $2,000 from sales, the total profit/loss amount is $2,000, and the rate is:
2,000 / 10,000 = 20%.
Data Calculation Methodology
To ensure accuracy and reliability, profit and loss calculations do not start from the earliest holding date. Instead, they are based on the later of two key timestamps, slightly adjusted for consistency:
- Feature Launch Time: The date when the profit and loss functionality became available.
- First Usage Time: The date when you first used the profit and loss feature.
This approach guarantees system stability and data integrity, ensuring that the calculations are based on actual transaction records rather than arbitrary dates.
Key Metrics Explained
Average Purchase Cost
- Formula:
Average Purchase Cost = Total Purchase Amount / Total Quantity Purchased
This metric, derived from the average holding price, reflects your average investment cost per token. For example, if you buy 100 tokens at $5 ($500) and another 100 at $7 ($700), the average purchase cost is:
(500 + 700) / (100 + 100) = $6.
This value forms the foundation for profit and loss calculations.
Average Selling Price
- Formula:
Average Selling Price = Total Sales Amount / Total Quantity Sold
This represents the average revenue per token from sales. For instance, selling 50 tokens at $10 ($500) and 50 at $12 ($600) gives an average selling price of:
(500 + 600) / (50 + 50) = $11.
It helps quickly assess the average return from sales.
Realized Profit/Loss Amount
- Formula:
Realized Profit/Loss Amount = Sum of Profit/Loss from Daily Sales
Calculated by adding the profit or loss from each sale transaction per day. The formula for a single sale is:
Profit/Loss per Sale = (Selling Price - Average Purchase Cost) × Quantity Sold
Example:
With an average purchase cost of $6, selling 100 tokens at $10 yields:
(10 - 6) × 100 = $400.
Realized Profit/Loss Rate
- Formula:
Realized Profit/Loss Rate = Realized Profit/Loss Amount / Total Purchase Cost Within the Statistical Range
This ratio measures investment efficiency. For example, with a profit of $400 and a total purchase cost of $1,200, the rate is:
400 / 1,200 ≈ 33.33%.
Handling Transferred Assets
In the current version, assets transferred from external platforms are not included in the purchase cost calculations. This design focuses solely on transactions conducted within the platform. However, future updates aim to incorporate transferred assets for more comprehensive data accuracy.
Data Sources for Profit and Loss
Profit and loss statistics for buys and sells are exclusively based on transactions aggregated from decentralized exchanges (DEXs) within the platform. This ensures consistency and reliability in the data presented.
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Frequently Asked Questions
What is single token profit and loss analysis?
It is a method to calculate the profit or loss generated from holding or trading a specific cryptocurrency token. It helps investors evaluate performance and make informed decisions.
How is the average holding price determined?
The average holding price is calculated by dividing the total amount spent on purchases by the total quantity of tokens acquired. It represents the average cost basis for your holdings.
Why are transferred assets excluded from calculations?
Transferred assets are currently excluded to focus on platform-based transactions. Future versions will include them for more accurate cost basis calculations.
Can I use this analysis for long-term investment tracking?
Yes, the total profit and loss metrics provide a holistic view, making them suitable for long-term performance assessment.
How often is the profit and loss data updated?
Data is updated in real-time based on transaction records, ensuring that the metrics reflect the latest market activities.
What if I have transactions from multiple decentralized exchanges?
The system aggregates all DEX transactions within the platform, providing a unified view of your profit and loss regardless of the exchange used.