As the craze for Meme coins continues to ferment, investors are flocking into the market with significant short-term volatility. The high-risk trading model of PVP attracts many seeking quick profits, but it also brings significant market volatility.

In contrast, liquidity provision (LP) strategies have become a new choice for investors who focus more on long-term returns due to their stable fee income and ability to hedge market risks.



On November 30, X blogger obtained a 50-fold return in just 3 days by forming a KACY/SOL pool LSP.

The explosion of MemeFi not only attracted short-term investors but also led many users to explore more robust income methods. Against the backdrop of significant fluctuations in the Meme coin market, liquidity provision (LP) strategies have gained attention for their dual income model.



Through gmgn we can see that most liquidity pools for Meme coins are provided by Raydium. Raydium is the largest decentralized exchange on the Solana network and is also the third-ranked ecological protocol on the Solana chain by TVL.



Next, let's take a look at how to operate:


1. Open Raydium's official website. (https://raydium.io/swap/). Connect your frequently used wallet in the top right corner of the link. After linking the wallet, we can set the language to Simplified Chinese here.

Then we can see a liquidity option in the top left corner. Click on liquidity and select the 'Concentrated' label. We can search for the meme tokens we already have in the search box, such as the ai16z and sol trading pair.


After searching, we found many pools; we can see many pools below. When filtering pools, you can choose according to your trading habits. For example, a 2% fee rate means higher returns for liquidity providers, while a lower fee rate can attract more trading participants, enhancing liquidity and trading volume.



The data we see shows that the first pool has a larger scale, higher trading volume, and greater profit potential. Here we can choose the 2% fee rate pool and click to deposit.


After depositing, there will be a default price range. The current price is this white line; we choose 10%. If it drops by 10% or rises by 10%, it will use the pool you provided. Suppose I want to add 0.01 sol and 2.46 ai16z. This means that if the price of ai16z drops by 10%, it will gradually exchange your sol for ai16z, and if ai16z rises by 10%, it will gradually exchange your ai16z for sol. The range can be set by yourself.

The top right corner will also set the slippage, usually set at 2.5%. If it is more active, you can increase the slippage to ensure you can enter the pool.


Some friends said, I only want to invest my meme tokens and do not want to invest in sol. In this case, you can open a single-sided liquidity position. First, switch the price at the bottom to the sol price. Then, in the box for setting the price range, drag the price line on the left. Drag it to the right of the white line. At this point, when the price of ai16z exceeds the current price, it will gradually convert to sol for you. This is suitable for those who want to sell at a high price.

If you want to accumulate continuously and buy ai16z at a low price, you can move the price line on the right to the left, moving it to the left of the white line, and then expand the range on the left. This means investing in sol; as the price of ai16z drops, you can gradually exchange sol for ai16z.

Finally, if you find it a bit complicated, you can directly choose the default price ratio range, such as 10% or 20%.

Although some memecoins can easily go to zero, as long as the trading volume is large enough, LP can still earn brilliant profits through transaction fees.

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