What is a liquidity pool?

There is no order book and no counterparty waiting on the other side. Traders swap straight against a reserve of tokens. Liquidity providers put up that reserve, usually a pair like SOL and USDC, and get a claim on their share of it, either as an LP token or, in concentrated pools, a position NFT. Every swap pays a fee, and the fee goes to them.

Prices come from a formula, not from quotes. Buy SOL out of a SOL-USDC pool and the pool holds less SOL and more USDC afterwards, so the formula marks SOL up. Arbitrage bots then trade the pool back toward the price on other venues. That is the whole mechanism that keeps pools in line with the market.

LPs carry one risk that plain holders do not. When prices move, you end up holding more of the token that fell and less of the one that rose. That drag is called impermanent loss, and fees have to beat it before LPing beats just holding.

Say a SOL-USDC pool holds $4 million and does $2 million of volume a day at a 0.25 percent fee. That is $5,000 a day for providers, roughly 45 percent APR. Only if volume holds flat for a year, which it almost never does.

Also called: LP, AMM pool.

Raydium pools lists standard and concentrated Raydium pools sorted by volume, TVL or APR, with each pool's fee tier, 24-hour fees and 24-hour and 7-day APR. Pools under $250k TVL are left out because their APRs mean little. Trending on-chain ranks active pools on most supported networks using GeckoTerminal data.

• Raydium pools
• Trending on-chain

• Automated market maker
• Impermanent loss
• Concentrated liquidity
• Liquidity
• Yield farming