Token Turnover Ratio
The token turnover ratio is a quantitative measure representing the percentage of a total token supply that is traded or exchanged over a defined period. It is closely related to asset velocity but focuses specifically on the proportion of the circulating supply that changes ownership.
A high turnover ratio suggests a highly liquid and active market, whereas a low ratio indicates illiquidity or a concentrated holder base. Traders use this ratio to identify periods of market exhaustion or potential accumulation phases.
In decentralized finance, a high turnover ratio can also signal that liquidity providers are frequently rebalancing their positions. It is a key indicator for assessing the efficiency of market makers and the overall health of exchange-based order books.