# Market Valuation

Finally, the **market valuation** is determined by the community when it sets the initial price of $VAPE. This occurs when the first liquidity pool is created by the community. The market valuation is determined by pairing x-amount of VAPE tokens with y-amount of a 2nd token. The resulting calculation is \[Total Value of 2nd Token] / \[Quantity of VAPE Tokens paired].

As an example, if the individual who creates the first liquidity pool determines that VAPE should be worth $0.1547 and they want to create the pool with 100 VAPE tokens, they would need to add 15.47 USDC worth of value for the 2nd token in the pair. The creation of the liquidity pool is a mechanic that ensures that there isn’t a runaway or unrealistic valuation.

<figure><img src="https://miro.medium.com/max/700/1*Dms_PmHLE-bvSSx6mZlZGA.png" alt=""><figcaption></figcaption></figure>

The above graphic shows a variety of hypothetical scenarios, showing what the market price, market cap, and fully diluted value of VAPE would be — based on how much value is paired with VAPE when the first liquidity pool is initially created.


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