How to Use the Honk Index to Gauge Market Sentiment in DLMM?
Honk Index by GooseDAO is an indicator similar to the Fear & Greed Index, but designed for LPing! 📊
🔹 Helps determine when to add liquidity and when to hold off.
🔹 Updates every 15 minutes.
❓ What is the Honk Index?
The Honk Index tracks key DLMM market conditions, filtering out unsuitable assets:
✅ Lincoln Score > 1%
✅ Market Cap > $2M
✅ Age > 4 hours
🔍 Excludes coins with fake activity and unprofitable pools, leaving only viable ones.
❓ What is the Lincoln Score and why >1%?
The Lincoln Score by @linclonlogging ranks DLMM pools based on:
📊 Swap activity (1h, 6h, 24h)
📊 Fees earned from each swap
📌 1%+ → Minimum for a viable pool.
📌 >3% → Strong pool with sustainable volume & fees.
📌 <1% → Avoid (low volume, weak fees, IL risk).
📊 How to Read the Honk Index?
🔹 Pools → Number of viable pools in the last 15 minutes
🔹 Imb → % of swaps in the top 20% pools
🔹 1d Vol → Volume in viable pools (24h)
🔹 1d TVL → Change in TVL over 24h
🔹 1d Fees → Fees earned over the last 4 reports
🔹 1d Yield → 1d Fees / 1d TVL (LP profitability)
🚀 How to Use for LP?
🟢 Pools UP → More opportunities, healthy market.
🟢 1d Yield >3% → LP is profitable, even if fees drop.
🟢 Imb DOWN → Swaps are evenly distributed = stable revenue.
🔴 Imb HIGH → Volume is concentrated in a few pools → Be selective.
🔴 1d Vol DOWN → Market might be slowing down.
📌 Example: How to Interpret the Honk Index?
🟢 Pools: 42 (+13.8%) → More viable pools opening.
🟢 Imb: 48.1% (-4.3%) → Healthier market.
🔴 1d Vol: 159.1M (-9.4%) → Volume declining.
🟢 1d TVL: 21.8M (+10.0%) → Capital inflow.
🟢 1d Fees: 719.4K (+20.2%) → Fee growth.
🟢 1d Yield: 3.31% (+9.2%) → Good time for LP.
✅ If yield is >3%, LP remains profitable, even if fees decrease.
🦢 Want Real-Time Honk Index Updates in Discord?
🔗 Install the bot:
👉 Add to server
💬 Use the command /honk_index
🔗 GitHub: https://github.com/foxtroteth/honk-index/blob/main/Honk%20Index.js
🔗 Source: https://x.com/thegoosedao/status/1885653476405137683