Skip to main content

Selling Tokens Guide

RISK WARNING

Token sales may result in significant losses. Market conditions can change rapidly.

Before selling:

  • ✅ Verify current market price and liquidity
  • ✅ Understand slippage and price impact
  • ✅ Check whether the AMM is still in IBR or has handed off to CRR pricing
  • ✅ Be aware of tax implications in your jurisdiction

This is a technical guide only, not financial advice. Consult professionals for tax and legal guidance.

This guide provides step-by-step instructions for selling Hokusai model tokens on the bonding curve AMM. Learn how to identify the active pricing regime, get quotes, set slippage protection, and execute sales.

Important Prerequisites​

⚠️ Selling Context​

Selling behavior depends on the AMM's current phase:

IBR active:      Quotes reflect flat launch pricing at $0.01/token
CRR active:      Quotes reflect reserve-ratio bonding curve pricing

Before attempting to sell, verify which pricing regime is active.

What You Need​

  1. Token Balance: Tokens in your wallet
  2. Crypto Wallet: MetaMask, Rabby, or Web3 wallet
  3. Gas Token: ETH, MATIC, etc. for transaction fees
  4. AMM Address: Model's AMM contract address
  5. Trade Context: Know whether the AMM is still in IBR or already on CRR pricing

Check the Active Pricing Regime​

Method 1: Via Contract​

const amm = await ethers.getContractAt("HokusaiAMM", ammAddress);

const tradeInfo = await amm.getTradeInfo?.();
console.log(tradeInfo);

Method 2: Via Block Explorer​

1. Go to AMM contract on Etherscan
2. Click "Read Contract"
3. Find any launch-status or trade-status read method
4. Click "Query"
5. Result:
   - Indicates whether the AMM is still in IBR
   - Indicates whether CRR pricing is already active

Method 3: Check Timestamp​

const reserve = await amm.getReserve();
console.log(`Current reserve: ${ethers.formatUnits(reserve, 6)} USDC`);
console.log("Compare this with the $25,000 IBR handoff threshold");

Overview of Selling Process​

1. Check Phase → 2. Approve Tokens → 3. Get Quote → 4. Set Slippage → 5. Execute Sell

Time Required: 5-10 minutes Complexity: Beginner-friendly Gas Cost: $2-20 depending on network

Step-by-Step Guide​

Step 1: Check Your Token Balance​

Via Wallet:

  • Most wallets display token balances
  • Make sure you're viewing the correct token

Via Contract:

const token = await ethers.getContractAt("IERC20", tokenAddress);
const balance = await token.balanceOf(yourAddress);
console.log(`Balance: ${ethers.formatUnits(balance, 18)} tokens`);

Via Block Explorer:

1. Go to token contract address
2. Click "Read Contract"
3. Find "balanceOf" function
4. Enter your wallet address
5. Click "Query"

Step 2: Check Current Price​

See what price you'll receive:

Via Contract:

const price = await amm.spotPrice();
console.log(`Current spot price: ${ethers.formatUnits(price, 18)} USDC/token`);

Important: Spot price is BEFORE your sell. Your actual price will be slightly lower due to:

  • Price impact (your sell pushes price down)
  • Trading fees (0.30% default)
  • Slippage

Step 3: Get a Sell Quote​

Calculate how much USDC you'll receive:

Via Web Interface:

1. Enter token amount to sell
2. System shows: "You will receive ~X USDC"
3. Price impact percentage displayed

Via Contract:

const tokenAmount = ethers.parseUnits("1000", 18); // 1000 tokens
const usdcOut = await amm.getSellQuote(tokenAmount);
console.log(`Quote: ${ethers.formatUnits(usdcOut, 6)} USDC`);

// Calculate effective price
const effectivePrice = usdcOut / tokenAmount * BigInt(1e12);
console.log(`Effective price: ${ethers.formatUnits(effectivePrice, 18)} USDC/token`);

// Calculate price impact
const spotPrice = await amm.spotPrice();
const priceImpact = (spotPrice - effectivePrice) * 100n / spotPrice;
console.log(`Price impact: ${priceImpact}%`);

Example Output:

Selling: 1000 tokens
Quote: 495.50 USDC
Effective price: 0.4955 USDC/token
Spot price: 0.50 USDC/token
Price impact: 0.9%

Step 4: Approve Token Spending​

The AMM needs permission to burn your tokens:

Via Web Interface:

1. Click "Approve Tokens" button
2. Review approval amount in wallet
3. Confirm transaction
4. Wait for confirmation

Via Block Explorer:

1. Go to token contract
2. Click "Write Contract" → "Connect Wallet"
3. Find "approve" function
4. Enter:
   - spender: [AMM contract address]
   - amount: [token amount in wei, 18 decimals]
5. Click "Write" → Confirm in wallet

Via JavaScript:

const token = await ethers.getContractAt("IERC20", tokenAddress);
const tokenAmount = ethers.parseUnits("1000", 18);

// Approve AMM to spend tokens
const approveTx = await token.approve(ammAddress, tokenAmount);
await approveTx.wait();
console.log("Tokens approved for selling");

Example (1000 tokens):

spender: 0x1234...abcd (AMM address)
amount: 1000000000000000000000 (1000 * 10^18)

Step 5: Set Slippage Tolerance​

Protect yourself from unfavorable price movements:

Recommended Slippage:

  • Normal conditions: 1-2%
  • High volatility: 3-5%
  • Large sells: 5-10%
  • Near IBR handoff: 3-5% (higher volatility)

Calculate minUSDC:

const quote = await amm.getSellQuote(tokenAmount);
const slippagePct = 2; // 2%
const minUSDC = quote * BigInt(100 - slippagePct) / 100n;

console.log(`Minimum USDC: ${ethers.formatUnits(minUSDC, 6)}`);

How It Works:

Quote: 500 USDC
Slippage: 2%
Minimum USDC: 500 × 0.98 = 490 USDC

If you receive < 490 USDC → transaction reverts
If you receive ≥ 490 USDC → transaction succeeds

Step 6: Set Deadline​

Prevent execution at stale prices:

Recommended Deadline:

  • Normal: 5 minutes (300 seconds)
  • Patient: 10 minutes (600 seconds)
  • Urgent: 2 minutes (120 seconds)
const deadline = Math.floor(Date.now() / 1000) + 300; // 5 minutes

Step 7: Execute Sell​

Via Web Interface:

1. Review sell details:
   - Tokens selling
   - USDC receiving
   - Price impact
   - Slippage tolerance
2. Click "Sell Tokens"
3. Review transaction in wallet
4. Confirm transaction
5. Wait for confirmation

Via Contract (Etherscan):

1. Go to AMM contract "Write Contract"
2. Find "sell" function
3. Enter parameters:
   - tokenAmount: [amount in wei]
   - minUSDC: [minimum USDC in 6 decimals]
   - deadline: [timestamp]
4. Click "Write"
5. Confirm in wallet

Via JavaScript (Complete Example):

const amm = await ethers.getContractAt("HokusaiAMM", ammAddress);
const token = await ethers.getContractAt("IERC20", tokenAddress);

// 1. Define amount to sell
const tokenAmount = ethers.parseUnits("1000", 18);

// 2. Check balance
const balance = await token.balanceOf(wallet.address);
if (balance < tokenAmount) {
    throw new Error("Insufficient token balance");
}

// 3. Get quote
const usdcOut = await amm.getSellQuote(tokenAmount);
console.log(`Quote: ${ethers.formatUnits(usdcOut, 6)} USDC`);

// 4. Calculate minUSDC (2% slippage)
const minUSDC = usdcOut * 98n / 100n;

// 5. Approve tokens
const approveTx = await token.approve(ammAddress, tokenAmount);
await approveTx.wait();
console.log("Tokens approved");

// 6. Set deadline
const deadline = Math.floor(Date.now() / 1000) + 300;

// 7. Execute sell
const sellTx = await amm.sell(tokenAmount, minUSDC, deadline);
console.log(`Transaction submitted: ${sellTx.hash}`);

// 8. Wait for confirmation
const receipt = await sellTx.wait();
console.log(`Transaction confirmed in block ${receipt.blockNumber}`);

// 9. Check USDC balance
const usdc = await ethers.getContractAt("IERC20", usdcAddress);
const usdcBalance = await usdc.balanceOf(wallet.address);
console.log(`USDC balance: ${ethers.formatUnits(usdcBalance, 6)}`);

Step 8: Verify Transaction​

Check Transaction Success:

1. View transaction on block explorer
2. Verify:
   - Status: Success ✓
   - Tokens burned
   - USDC received
   - Gas cost

Check Updated Balances:

// Token balance (should decrease)
const tokenBalance = await token.balanceOf(yourAddress);

// USDC balance (should increase)
const usdcBalance = await usdc.balanceOf(yourAddress);

console.log(`Tokens: ${ethers.formatUnits(tokenBalance, 18)}`);
console.log(`USDC: ${ethers.formatUnits(usdcBalance, 6)}`);

Common Issues & Solutions​

Issue 1: "Quote changed unexpectedly"​

Cause: The AMM may have moved from IBR flat pricing to CRR pricing, or the reserve changed materially between quote and execution.

Solution:

1. Refresh the quote
2. Check current reserve
3. Confirm whether the AMM is still in IBR
4. Retry with updated slippage if needed

Issue 2: "Insufficient Allowance"​

Cause: Tokens not approved or approval too low

Solution:

1. Check current allowance:
   token.allowance(yourAddress, ammAddress)
2. Approve sufficient amount:
   token.approve(ammAddress, tokenAmount)
3. Wait for confirmation
4. Retry sell

Issue 3: "Slippage Too High"​

Cause: Price moved unfavorably, receiving less USDC than minUSDC

Solutions:

  • Increase slippage tolerance (3-5%)
  • Reduce sell amount (smaller orders)
  • Wait for better market conditions
  • Split order into multiple smaller sells

Issue 4: "Insufficient Token Balance"​

Cause: Trying to sell more tokens than you own

Solution:

1. Check actual balance in your wallet
2. Reduce sell amount to match available balance
3. Ensure tokens are not pending in another transaction

Issue 5: Transaction Pending Too Long​

Cause: Gas price too low

Solutions:

  • Speed up transaction (increase gas)
  • Cancel and retry with higher gas
  • Wait for network congestion to decrease

Best Practices​

Timing Your Sale​

Good Times to Sell:

  • ✅ After significant price increase
  • ✅ Before large token minting events (dilution)
  • ✅ When hitting your price target
  • ✅ During low network activity (cheaper gas)

Times to Avoid:

  • ❌ Right at the IBR-to-CRR handoff (high volatility)
  • ❌ During panic selling
  • ❌ Network congestion (high gas)
  • ❌ Without checking price trends

Order Sizing​

Small Sells (< 1% of supply):

  • Minimal price impact
  • Low slippage needed
  • Quick execution

Medium Sells (1-5% of supply):

  • Moderate price impact
  • Medium slippage needed
  • Consider splitting

Large Sells (> 5% of supply):

  • ⚠️ Significant price impact
  • High slippage needed
  • Should split across time (TWAP)

Example Price Impact:

Reserve: $100,000
Supply: 1,000,000 tokens
Spot Price: $0.50

Sell 10,000 tokens (1%):
- Impact: ~0.5%
- Receive: ~$4,975 (avg $0.4975/token)

Sell 100,000 tokens (10%):
- Impact: ~5%
- Receive: ~$47,500 (avg $0.475/token)

Sell 500,000 tokens (50%):
- Impact: ~40%
- Receive: ~$150,000 (avg $0.30/token)

Profit-Taking Strategies​

Strategy 1: All at Once

When: Hit specific price target
Amount: Sell 100% of holdings
Pros: Simple, clean exit
Cons: No upside if price continues up

Strategy 2: Tiered Exits

$0.50: Sell 25% (recover initial investment)
$0.75: Sell 25% (take profit)
$1.00: Sell 25% (more profit)
$1.50: Sell 25% (final exit)

Pros: Capture more upside
Cons: More transactions, more gas

Strategy 3: Trailing Stop

Set: Sell if price drops X% from peak
Example: Sell if drops 20% from ATH

Price hits $1.00 → Set stop at $0.80
Price hits $1.20 → Raise stop to $0.96
Price drops to $0.96 → Sell triggered

Pros: Ride trends, protect profits
Cons: May sell during temp dips

Tax Optimization​

Consider Tax Implications:

Short-term (< 1 year): Higher tax rate
Long-term (> 1 year): Lower tax rate

Strategy: Hold >1 year if possible for tax savings

Tax-Loss Harvesting:

If token is down:
- Sell to realize loss
- Offset against gains
- Can rebuy after 30 days (wash sale rule)

Security Tips​

Protect Yourself:

☐ Verify AMM contract address
☐ Check token balance before selling
☐ Start with small test sell
☐ Double-check transaction details
☐ Verify USDC address is correct
☐ Be cautious during high volatility
☐ Never share private keys

Post-Sell Analysis​

Track Performance​

Calculate Returns:

// Example
const invested = 10000; // $10,000 USDC spent buying
const received = 12500; // $12,500 USDC from selling
const profit = received - invested; // $2,500
const returnPct = (profit / invested) * 100; // 25%
const holdingDays = 45; // Held for 45 days
const annualizedReturn = (returnPct / holdingDays) * 365; // ~203% APY

console.log(`Profit: $${profit}`);
console.log(`Return: ${returnPct}%`);
console.log(`Annualized: ${annualizedReturn}%`);

Record for Taxes​

Save This Information:

☐ Sell date and time
☐ Token amount sold
☐ USDC received
☐ Gas fees paid
☐ Average cost basis
☐ Holding period
☐ Transaction hash

Lessons Learned​

Reflect on Trade:

☐ Was timing right?
☐ Should have sold more/less?
☐ Was slippage optimal?
☐ Did strategy work?
☐ What to improve next time?

After Selling​

Options Post-Sale​

  1. Hold USDC

    • Safe, stable value
    • Ready for next opportunity
    • Earning potential in DeFi

  2. Reinvest in Same Token

    • Buy again if price drops
    • DCA (dollar-cost average) back in
    • Increase position size

  3. Invest in Other Models

    • Diversify across models
    • Find better opportunities
    • Manage risk

  4. Exit Crypto

    • Convert to fiat
    • Cash out profits
    • Reduce exposure

Need Help?​

Good luck with your sale!

Last updated on