Hey POM, i wanted to give you a simple brief of what a single sided LP position looks like. Its idea because you can provide the tokens to the LP without having to front USDC or SOL. The only difference is that you only earn fees from the upside of the token. This is a good trade-off for not having to provide "cash" and aligns with token value.

[Screenshot omitted at Quanatee's request]

This is what it looks like to provide 1% of your tokens (10M) to a DESLOP-USDC pool (meaning the token is paired with USDC). You can see that the USDC is 0, but the DESLOP is 10M. Volatility strategy of spot is good here, which basically means you will earn the same amount of fees at any price within the given price range. The price range (min-max price) reflects the current price up to mcap of ~100m, which i think is ideal. Probably better to set a bit higher but not too high in order to maximize feels but still give market participants believe that the token can reach those levels. (or better yet set all the way to 1B lol)

Just one tip, min price and max price will re-shift the price due to the bucketing system. This is normal behavior. Don't add the full position first. Add a bit- like 5M (0.5%) to get a feel for how it is, check and maybe even show us to confirm its done right. No refunds in crypto for getting it wrong 😭

Hey

lol this is not so serious

do you know anything about LP, AMM?

i need to know your level of knowledge so i can adjust

you dont know how green flag that is

im partially that way, but im not an online public guy so its not really required

Alright, i know where to start. So in traditional stock markets, you have an order book, bid/ask spread and limit orders?

Crypto didnt start with ANY of that, so we invented this thing called an Automated Market Maker (AMM) which replicates somewhat what a traditional market maker would do in the stock market

An AMM handles the buy and sell orders of trading in crypto. If i bought 5 deslop using sol, i bought from a liquidity pool (entity that executes the AMM concept) that has deslop/sol

that liquidity pool has to manage its own liquidity to ensure there is enough across the price range

Infact, the creator fees you're getting- they come from an LP. its just subtracted and simplified to the point we don't need to understand. We just need to know we get fees.

Any questions so far?

In the past, we didnt have infra like pump.fun, so whoever launched a token created their own liquidity pool. But this led to scams and rugs because the creator had total control over what they could do. Since then crypto evolved and we have launchpads like pump.fun, which are essentially trusted services that launch decentralized assets like the liquidity pool which are guaranteed immutable, which means they cannot be modified or changed once launched. That makes it trustless aka we dont need to trust pump.fun (kinda), if it launches from pump.fun some of the potential risk vectors are mitigated.

Some parts of this ecosystem have changed since of course, since we can now direct creator fees- so that part is now trust-based. but the core principles of the LP are still there

BTW, there isn't just 1 liquidity pool for a token. At launch yes there is only one which is from the launchpad

Its bidirectional. Kind of like an escrow. I want to sell deslop, but i dont have to manually find a buyer. I just sell through my app. The LP processes my sale and the price and market cap of the token is adjusted accordingly. If someone buys, the LP processes that purchase too, and the tokens price is adjusted again

Alright! but of course an escrow doesn't do work for free right?

so each transaction (buy/sell) has a fee attached to it

So the first LP that the launchpad creates, the creator fees that you've accrued are actually LP fees.

but that's like a solo adventure

crypto is multiplayer though

so anybody can actually create their own LP and compete in capturing the volume from people buying and selling to get those fees

Good so far?

Alright this is where it gets a bit complicated

There are 2 types of liquidity pools, standard and concentrated

Standard is basically a generalized and balanced liquidity pool that ensures that there is enough liquidity spread throughout the entire possible price range of a token, from $0 to $inf. Every launchpad starts with this. (Im simplifying here, really so if there is a contradiction its not because your thoughts are wrong if you chance on something else later on)

A standard LP is always a pair, like USD/JPY, we have DESLOP/SOL, or DESLOP/USDC

A standard LP needs to be funded with both tokens in order to function, and it generalizes across the entire possible pricing space

A concentrated LP is different. It's more customizable, more advanced. You can choose which price range you want to provide liquidity towards and because you have that choice, the liquidity you provide isn't spread thinly throughout the entire price range. The main benefit here is it maximizes the amount of fees they can earn. Another benefit is that it allows you to provide only 1 token in a pair, which basically single sided liquidity.

That means that you can provide liquidity to deslop using the deslop tokens that you already have, without having to put up SOL or USDC and earn fees from it. Providing liquidity is itself already a net positive because crypto prices swing a lot because of the lack of liquidity providers.

One question you might have: Why can't i provide single sided liquidity through the entire price range then?

Well because you cannot provide single sided liquidity to a current price. The AMM system needs to balance liquidity, and providing just 1 side doesn't do that unless you position the liquidity at a price that the token hasn't gotten to yet. So if i provided single sided liquidity at $1, and the price now is $0.5, thats fine. when the price goes to $1.1, that means some of the tokens i provided have been exchanged to the paired token like SOL

Understand so far?

Aight we're nearing the end here

When you provide liquidity, and some one buys- that means that the token you provided was sold

So indirectly- its kind of like you are selling your tokens + getting a fee on top of it.

But because you tokens are in a liquidity pool, it isn't exactly a sale either. If you never exit your liquidity pool, and the price comes back down to the same level as the transaction, when some one sells, your token comes back- aka you become a buyer.

Some people use this strategy to sell their tokens cleanly without dumping on the chart, others use it to earn fees from tokens with high volume

In any case, your objective should be to earn fees, and providing liquidity allows you to benefit from a much longer and aligned earning system as opposed to selling tokens directly

however considerate or timely your are in directly selling tokens, you need to know one thing

and it's the most important thing of all in this already long chat session

Crypto people are 80% idiots.

When we see dev selling, we panic and go "OMG WHY DEV SELL, DEV IS RUGGING HE A SCAMMER NOOOOOOOOOOOOOOO"

Even if it was planned and communicated, the result has always been the same. And because it has been the same, it forces the other 20% of non-idiot crypto people to react and accordingly as well.

Such is just the way of being in a more primitive space of trading

Which is why I hope you'll consider liquidity provisioning instead of direct sales

There, I'm done!

Floor is now yours for questions, or if you want my opinions etc

1. the psychological impact is important. Most traders use trading terminals with indicators of when the dev buys or sells, or even claims fees. For example:

aight wont need to make screenshots then

2. it wouldn't because the other benefit of providing liquidity is really- PROVIDING LIQUIDITY. Crypto is such an illiquid market that its hard for anyone to buy or sell in size, so thickening the pool is a net positive for taking the token more seriously

Happy to have helped!

(if you are going to share the chat for transparency purposes- dont share the screenshot from the first time i reached out- cos that i has my deets)

Oh i missed out one thing

Standard and concentrated liquidity pools go by different product names from different platforms Standard LP: Balanced AMM, DAMM Concentrated LP: Single Sided, CLMM, DLMM

just so if you're reading up or talking about it and people use different acronyms and terms, they're all the same