# How to Create Liquidity on Raydium？

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**Create Raydium Liquidity:** <https://raydium.io/liquidity-pools/>
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### 🌊 What Is Raydium?

* Raydium is an **Automated Market Maker (AMM)** built on the **Solana blockchain**. It leverages a **central limit order book** to enable lightning-fast trades, shared liquidity, and new yield-generating opportunities.

### 🧩 Raydium Pool Types Explained: CPMM / CLMM / AMMv4

Below is a comparison of the three common pool types on Raydium and their typical use cases.

|                 Type                 |            Model & Features           |                             Advantages                             |                      Best Use Case                      |
| :----------------------------------: | :-----------------------------------: | :----------------------------------------------------------------: | :-----------------------------------------------------: |
|  ⚙️ **CPMM (Constant Product AMM)**  |      Uses the (x \* y = k) model      | Supports Token-2022, multiple fee tiers, stable capital efficiency |     General trading pairs, first-time pool creation     |
|      🏛️ **AMMv4 (Legacy AMM)**      |    Raydium’s historical AMM version   |              Mature, stable, compatible with OpenBook              | Legacy projects, users requiring backward compatibility |
| 🎯 **CLMM (Concentrated Liquidity)** | LPs define price ranges for liquidity |          Deeper liquidity, lower slippage, flexible yield          |    Advanced LPs, market makers, strategy-driven users   |

***

### 🛠️ How to Add Liquidity on Raydium (Create a Pool)

#### 1️⃣ Connect Your Wallet

Open Raydium [(Liquidity page)](https://raydium.io/liquidity-pools/) and click **Connect Wallet** to connect your Solana wallet (e.g. Phantom).

<figure><img src="/files/G0S4clT6otX29YREgmeH" alt=""><figcaption></figcaption></figure>

#### 2️⃣ Go to Pool Creation

Navigate to **Liquidity → Create**.

<figure><img src="/files/ao40PHTu8T06ZOYXn9YV" alt=""><figcaption></figcaption></figure>

#### 3️⃣ Choose Pool Type

You can select one of the following:

* **CPMM (Standard AMM)**
* **CLMM (Concentrated Liquidity)**
* **AMMv4 (Legacy AMM)**

<figure><img src="/files/5FgKDBRckTv7QRobHSmp" alt=""><figcaption></figcaption></figure>

#### 4️⃣ Configure Pool Parameters (CLMM Example)

**1.Select Base & Quote Tokens**

* The **base token** is the first token displayed in the trading pair.
* The **quote token** is the token used to price the base token.

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For example, the quote token represents how much of it is required to buy **1 unit of the base token**.\
Common quote tokens include **SOL, USDC, or other stablecoins**.
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<figure><img src="/files/KuFV95zgiMf5O4OEiT1A" alt=""><figcaption></figcaption></figure>

**2.Select Fee Tier**

The selected fee is paid by traders. Liquidity providers receive:

* **100% of token emission rewards**
* **84% of trading fees**, while:
  * **12%** goes to RAY buybacks
  * **4%** goes to the project treasury

**Available fee tiers (selectable by pool creator):**

* **0.01%** – Very stable assets
* **0.05%** – Pegged assets and high-volume pairs
* **0.25%** – Most token pairs
* **1%** – Exotic or highly volatile pairs

<figure><img src="/files/wvzLpdPUZosykjVXzEym" alt=""><figcaption></figcaption></figure>

**3.Set Initial Price**

The **initial price** defines how much quote token is required to purchase **1 base token** at pool creation.

The pool creator may view the price in either base token or quote token terms.

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Once the pool is confirmed and initialized, the **initial price, fee tier, and initial liquidity cannot be edited**. However, the pool creator can add additional liquidity within any chosen price range at a later time.
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<figure><img src="/files/JFW9jVzzSJ2lgaLCA92H" alt=""><figcaption></figcaption></figure>

**4.Choose Position Price Range**

When selecting the initial price range, you are only defining **your first liquidity position**.

After the pool is created:

* Other users may add liquidity at **any price range**
* You can withdraw or create new positions at any time

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By default, the system suggests a range of **±50% around the initial price**, but you may customize it.
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**In CLMM:**

* If the market price **falls below your lower bound**, your position becomes **100% base token** (accumulating at lower prices)
* If the market price **exceeds your upper bound**, your position becomes **100% quote token** (selling at higher prices)

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This differs from **CPMM**, where liquidity is distributed automatically across the entire price range (from 0 to ∞).
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<figure><img src="/files/C9iQPY5i3KWV5CQ7h6ca" alt=""><figcaption></figcaption></figure>

**5.Deposit Amount**

* The deposit amount represents the quantity of base and quote tokens used to initialize the pool.
* Based on your previous settings, the system will automatically calculate the deposit ratio.\
  The pool creator may manually adjust the amount of base and quote tokens.

<figure><img src="/files/t0HPPHZLqLusRoadSNc6" alt=""><figcaption></figcaption></figure>

**6.Preview & Confirm**

* After setting the deposit amount, preview the pool configuration.
* Click **Confirm Deposit** and approve the transaction.&#x20;
* 🎉 Congratulations! You have successfully created a **concentrated liquidity pool on Raydium**.

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Due to pool initialization, **network gas fees will be higher than usual**
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Once the transaction is approved and the pool is live:&#x20;

1. The initial price and initial liquidity **cannot be modified**&#x20;
2. The pool creator may still manage positions or add liquidity within any preferred price range

***

<details>

<summary>What Are the Benefits of Providing Liquidity in Raydium Traditional AMM Pools (CPMM)?</summary>

**Earn Trading Fee Revenue：**&#x41; **0.25% trading fee** is charged on swaps within the pool, of which:

* **0.22%** is distributed to the LP pool
* **0.03%** is allocated to the **RAY single-sided staking pool**

**Earn OpenBook Market-Making Revenue：**

* Raydium AMM automatically provides liquidity on the **OpenBook order book**.
* Market-making revenue generated on OpenBook is distributed proportionally to liquidity providers.

**Receive LP Tokens as Proof of Liquidity：**&#x41;fter adding liquidity, you will receive **LP tokens** representing your share of the pool.

**Example:** Deposit **RAY + USDC** → receive **RAY-USDC LP**

As trading occurs, fees accumulate in the pool, and the **value of LP tokens increases accordingly**.

</details>

<details>

<summary>What Are LP Tokens?</summary>

LP tokens represent your **proportional ownership** of assets in a liquidity pool.

**Example:** Add liquidity to the **SOL-RAY** pool → receive **SOL-RAY LP**

You may redeem LP tokens at any time to withdraw your corresponding share of the pool’s assets.

</details>

<details>

<summary>What Are Ecosystem Farms?</summary>

* **Ecosystem Farms** are a new type of **permissionless farming mechanism** designed for Raydium traditional AMM pools.
* Any project team or user can create a farm to distribute rewards for a specific pool, further enhancing liquidity across the Solana ecosystem.

</details>

<details>

<summary>What Are the Benefits of Providing Liquidity in Raydium CLMM Pools?</summary>

**CLMM (Concentrated Liquidity Market Maker)** is designed for more advanced liquidity providers.

**Concentrated Liquidity and Higher Capital Efficiency：**&#x4C;Ps can choose a **custom price range** in which their liquidity is active.

This results in:

* More concentrated liquidity
* Higher fee efficiency
* Lower trading slippage

**More Flexible Risk Management：**&#x42;y selecting different price ranges, LPs can express different market views, such as **bullish, bearish, or neutral** strategies.

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**Note:** Impermanent Loss (IL) risk is higher, especially when the market price moves outside the selected range.
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</details>

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**Learn more about Raydium liquidity pools and rules：**<https://docs.raydium.io/raydium>
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**Create a Standard AMM Pool:** <https://docs.raydium.io/raydium/zhong-wen/chuangjian-chi-zi/chuang-jian-biao-zhun-amm-chi>
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