If you want to create a liquidity pool for SPL tokens, then this article is for you. We will show you how to create a liquidity pool for your token and elaborate on the relevant considerations.
What is a liquidity pool?
A liquidity pool is a group of funds that allows users to freely buy and sell tokens in it. It achieves free exchange by forming a "pair" of two tokens and maintaining a certain number of tokens. Usually, one of the tokens has a stable value (such as SOL, USDC, etc.), which enables the other token in the currency pair to obtain a price. Anyone can create a liquidity pool and buy and sell in it without any permission.
Liquidity pools have become the backbone of DeFi applications, streamlining transactions, improving price discovery efficiency, and supporting financial activities such as lending and yield farming.
Factors affecting the creation of liquidity pools
Before we start creating a liquidity pool, let’s look at 4 factors that will help you make the decision:
1. Creation cost:
You need to deposit tokens, usually stablecoins or other tokens (such as SOL or USDC), to ensure that there is sufficient liquidity in the pool. In addition, you need to pay DEX-related fees, which vary depending on the blockchain.
2. Fixedness of Token Pairs:
Once a token pair is determined and liquidity is added, the token pair composition cannot be changed. If a new token pair needs to be created, it will need to be recreated and the corresponding fees will need to be paid. Therefore, you should choose carefully when initially setting up a token pair.
3. Advantages of stablecoins:
Using tokens with high price volatility to create a liquidity pool will lead to drastic price fluctuations, while choosing stablecoins can keep prices stable. The price of tokens will be mainly affected by market supply and demand: when demand increases, the price will rise, and when demand decreases, the price will fall.
4. Risk Assessment:
Creating a liquidity pool will cause token prices to fluctuate. If the price drops too much, the project may be at risk. Therefore, the potential impact should be assessed in advance to ensure a robust economic model.
How to Create a Solana Token Liquidity Pool
1. Create the OpenBook Marketplace
(If you have already created it, you can skip this paragraph)
Start the process:
Visit slerf.tools/liquidity-creator/solana and connect your wallet. Creating an OpenBook market means we will create a token pair that we will use to create a liquidity pool later.Set starting price:
The starting price is 0.29 SOL, and the maximum cost is 2.7 SOL. Adjust the Market ID size according to your needs. Note that cheap Market IDs are prone to errors when the transaction volume is high. Serious projects are advised to increase the cost.Select Token:
Base Token: Select the token you created that is not yet traded in the market.
Quote Token: SOL or USDC is recommended.
Set the transaction parameters:
Minimum purchase and sale amount: Usually set to 100.
Minimum price adjustment: 0.000001 as recommended by Raydium.
advanced options:
To adjust the Market ID size, you can set the following parameters in Advanced Options:0.29 SOL (Basic Edition):
Event queue length: 128
Request queue length: 63
Order book length: 201
1.4 SOL (Enhanced Edition):
Event queue length: 1400
Request queue length: 63
Order book length: 450
2.7 SOL (Advanced Edition):
Event queue length: 2978
Request queue length: 63
Order book length: 909
Complete and confirm:
Click "Create Market" and confirm the transaction, the amount is expected to be between 2.5 - 5 SOL. Once completed, you will get an OpenBook Market ID.
2. Create a Solana Liquidity Pool in 5 Steps
Connection creation page:
Visit slerf.tools/liquidity-creator/solana and connect your wallet.Select Token:
Base Token: Select a token you created that has no market value yet.
Quote Token: Choose a token of value, usually SOL or USDC.
Setting parameters:
Minimum Order Size: The minimum amount of tokens a user can purchase.
Tick Size: The minimum amount that changes the token price.
Advanced options: Event queue length, Request queue length and Order book length.
Set liquidity and launch date:
Set the token and amount of SOL/USDC to add, and choose a launch date (optional).Create and confirm:
Click "Create Liquidity Pool" and accept both transactions. Save the Market ID and Liquidity Pool Address for future use.
Once created successfully, you will see the market ID and the address of the liquidity pool. Save them as you may need these addresses for future use.
Frequently Asked Questions
1. What is the minimum order quantity?
The minimum order quantity is the smallest transaction amount that can be accepted in the order book. For example:
Setting to 2: means the minimum transaction volume is 0.01.
Setting to 4: means the minimum transaction volume is 0.0001.
Set to 5:This means the minimum transaction volume is 0.00001.
This parameter ensures that only orders that meet the criteria enter the market.
2. What is the minimum price change?
The minimum price change is the smallest unit of change in price. For example:
Setting to 3: Prices will be displayed with three decimal places, such as 11.123.
Set to 5:The price will be displayed to five decimal places, such as 11.12345.
This parameter controls the accuracy and adjustment range of market quotes to ensure that prices are displayed reasonably and uniformly.
3. Is it possible not to create an OpenBook?
Currently, creating liquidity pools on Raydium still relies on OpenBook Market. As a decentralized order book protocol, it provides support for market matching and trading. However, as the DeFi ecosystem continues to develop, Raydium may gradually fade or completely replace the use of OpenBook in the future. Please pay close attention to Raydium's updates to learn about the best liquidity creation methods.
#创建OpenBook #创建SPL代币 #创建Solana流动性 #Solana加池子 #Solana一键发币
