DLMM has been growing from strength to strength since the launch of MET points, Kamino vault integrations, and a market making collaboration with Keyrock. Our LP Army is also becoming more knowledgeable and active thanks to our DLMM Strategy Sessions and the awesome community members stepping up to help educate one another!
Thanos from Keyrock, a professional market maker, stated in the call that he was impressed with DLMM’s ability to capture volume and fees. From his team’s experience experimenting with DLMM so far, by just deploying $500K — $1M in TVL, even with a relatively wide range, they were at times able to capture up to $30M per day in volume!
The Best LP Army: Culture, Education, Tools
Based on discussions with Keyrock, there appears to be a rise in trading bot volume and toxic liquidity flow on Solana, especially towards extremely low fee liquidity pools. We realized that an overemphasis on trying to be Number 1 in on-chain trading volume by simply lowering fees aggressively across pools may not be healthy or sustainable for any DEX. It is also not a suitable anchor narrative for our upcoming MET token launch. We need to reach Number 1 via a different, more value-adding approach.
As such, we propose to focus instead on building up THE BEST LP Army in all of crypto! What does this mean?
- Adding to our ranks: Encourage more Solana users to be LPs (liquidity providers) and nurture an active and engaged community of LPs that train fellow comrades on how to use Meteora
- Providing the best LP education: Educate more LPs to be great at liquidity management, by having the best articles, tweets, infographics, videos, and sharing sessions to help LPs level up their game — starting with our DLMM Strategy Sessions
- Building tools to enhance the LP experience: For example, developing an open source market making/LP telegram bot to help users better manage their liquidity positions with simple commands on telegram
Shoutout to our community builders kagren | zippy stake pool and Richard_ISC for building tools for the LP army!
- kagren | zippy stake pool created his first version of a Dune dashboard that shows both Orca Whirlpool and Meteora DLMM liquidity distribution. Check it out here!
- Richard_ISC gave a sneak peek of a PNL viewer for DLMM:
For Meteora and on a wider scale, Solana, to thrive, we cannot only depend on professional market makers. Creating and training a strong army of informed LPs who understand the benefits of DLMM have the potential to give Meteora the definitive edge in the long run. We foresee the LP Army being our long term MET holders and the base and foundation of Meteora.
It is important to note that we will not be slowing down efforts to raise our trading volume and TVL; we just plan to approach those targets in a more meaningful and sustainable way that adds intrinsic value for LPs.
We’re glad that community members are excited about this fresh approach. Geeklad agrees that it is counterproductive to try to capture toxic flow long-term and attract more users only for them to get burned from the challenges of using an advanced product. The better long-term play is working together to educate everyone on LP strategies and how to be profitable.
Durden and C2yptic also highlighted that DEXes tend to focus on whales and rarely teach the bulk of LPs to provide liquidity intelligently, so it would indeed be a differentiating factor if Meteora actually puts in effort to take care of its LPs.
Proposed Streamflow collaboration
Lui from Streamflow came on stage to share about their role in DeFi and discuss a potential collaboration with Meteora. Streamflow helps align incentives for projects and long term stakeholders, by incentivizing users to stake and lock their tokens they purchased or received from airdrops.
This brought to mind community member Bsktfi’s proposal on our governance forum to allow pool creators and projects to lock a certain percentage of liquidity within pools on Meteora, in order to reduce the risk of sudden liquidity withdrawal. This is meant to instill confidence among market makers and LPs, especially for memecoins.
Since Meteora does not allow liquidity locking at the moment and the team is also busy with other product releases in the pipeline, we could tap on Streamflow’s expertise for such a feature!
One idea raised was to have Meteora integrate Streamflow so pool creators and projects don’t need to visit an external site and can simply lock their tokens directly on our Meteora UI after adding liquidity. Token locks can then be displayed as part of the pool or token information.
Streamflow currently only has an open source SDK, which is already being used by projects like rugcheck.xyz. But thanks to this discussion with the Meteora community, Streamflow are considering the development of a new plugin or widget (similar to Jupiter Terminal) so projects like Meteora can easily add it to their website. It was also great to learn that Streamflow are in fact LPs on Meteora and are well versed with our product!
The ability to lock tokens on Meteora would open up a lot more possibilities. As Geeklad mentioned, in the future it might be possible for LPs to lock tokens to gain a share of protocol revenue or other advantages on Meteora, further aligning the success of our project with their contributions. Additional rewards can also be dropped to Streamflow’s lock contracts to incentivize token holders. Moreover, Imprfekt recalled that many retail users, not just projects, would be grateful for the ability to use Streamflow to “diamond hand” their tokens.
We would love to see more developers build on top of Meteora and Streamflow can start the ball rolling!
If you’re a project or developer keen to collaborate with Meteora, share your ideas in our community call in discord, hosted every Wednesday, 10.30 am ET (10.30pm GMT+8).
Thank you Lui | Streamflow, Durden, C2yptic, Thanos | Keyrock, Imprfekt, kagren | zippy stake pool, Richard_ISC, Geeklad, Bsktfi, and other members of our LP Army for your contributions!
