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Meteora Navigator
@meteoranavigator
February 10

❖ What is Meteora?

Meteora is a DEFI project that provides users with a set of tools for creating dynamic liquidity pools on the Solana blockchain and supplying liquidity to them.

Currently, Meteora offers a point farming program with the following structure:

  1. 1 point for every $1 of assets provided in the project’s TVL per day.
  2. 1000 points for every $1 earned in trading fees.

10% of MET tokens are allocated for user rewards.
However, points can only be earned by using tools such as Dynamic Pools, DLMM, and Multi-token Pools, which will be explained below.

❖ A Wide Range of Opportunities

Meteora offers a variety of tools for liquidity providers, including:

1. DLMM Pools

DLMM (Dynamic Liquidity Market Maker) allows liquidity providers (LPs) to benefit from:

  • Dynamic fees and real-time liquidity concentration,
  • The ability to customize their volatility strategy,
  • The highest TVL among all Meteora tools (over $1 billion).

2. Dynamic AMM Pools

Liquidity providers can earn additional yield through lending alongside traditional swap fees, enhancing profitability.

3. Dynamic Vaults

These optimize capital efficiency by distributing assets across lending pools, ensuring higher returns for LPs.

4. Multitoken Stable Pools

These pools combine liquidity from multiple assets into a single pool, enabling LPs to diversify holdings and maximize capital efficiency.

5. Non-pegged Stable Pools

Designed for non-pegged assets, these pools maintain stable asset value within the pool, ensuring optimal capital utilization.

Meteora Navigator helps users find the best farming opportunities within DLMM pools.

❖ Understanding DLMM

DLMM is a new form of concentrated liquidity market-making on Solana, designed to make liquidity provisioning more efficient and sustainable. These pools feature flexible settings, allowing users to create custom strategies across different price ranges.

One of DLMM’s key advantages is its ability to minimize slippage within liquidity pools.

"Slippage" refers to the difference between the expected price of an order and the actual execution price due to market fluctuations.

DLMM Pool Fees

Every transaction processed through a DLMM pool incurs a fee, which is determined by several parameters:

  • Base Fee – The minimum fee, ranging from 0.01% to 5%.
  • Max Fee – The maximum fee a pool can charge.
  • Dynamic Fee – The current fee, which adjusts based on trading activity (not lower than the Base Fee and not higher than the Max Fee).

Additional fee details available on the pool’s page:

  • Protocol Fee – Meteora takes 5% of all trading fees.
  • 24h Fee – The total fees earned by the pool in the last 24 hours.

What are Bins?

When a user creates a position in a DLMM pool, they will encounter bins.
For example, in a SOL/USDC pool with a bin step of 10 and a base fee of 0.01%, the bin structure helps determine liquidity distribution across price ranges.

The bars in the image above represent bins. Each bin contains a certain amount of liquidity within a specific price range. A single position in a pool can hold up to 69 bins. In this case, there are exactly 69 bins covering the price range from $198.455271 per 1 SOL to $212.412420 per 1 SOL.

When creating a position in the pool, users can choose how many bins it will contain.

Bin Size & Bin Step

Pools differ in bin size, which is determined by the Bin Step parameter. The Bin Step can have various values: 1, 5, 8, 10, 16, 20, 80, 100, 125, 200, 250, 400.

  • A pool with the largest Bin Step (400) covers the widest price movement (+1339.68% increase or -93.05% decrease when opening a position with only one asset from the pair).
  • A pool with Bin Step 1 concentrates more bins within a narrower price range, meaning maximum growth or decline is only 0.68% when opening a position with a single asset.

Liquidity Management Tools

DLMM offers several tools for users to distribute liquidity in different ways:

  • Spot
  • Curve
  • Bid-Ask

The first one is Spot.
This tool distributes liquidity equally among all bins within the selected price range. It ensures even fee farming throughout the entire price movement within the range.

The second tool is Bid Ask.
Most of the liquidity is concentrated at the edges of the range (or at one edge if the position is opened using only one asset from the pair).

The third one is Curve.
Most of the liquidity is concentrated around values closest to the current price.

❖ Where Does the Income Come From?

When someone swaps a token for which you have provided liquidity, the transaction may pass through your pool, and you earn a fee based on the trading volume flowing through that pool.

Jupiter acts as a router, directing transactions to different liquidity providers to ensure the best possible deal at the time.

Key Points to Understand:

🔹 Monitor the volume in your pool – The higher the trading volume, the more fees you earn. Each pool has a dedicated page on Dexscreener where you can track this data.

🔹 Liquidity concentration matters – The more concentrated your liquidity is within a smaller range, the higher the potential fees while the price remains within your range.

🔹 Fees are earned when price moves from one bin to another – If the price moves less frequently, you should use a smaller BinStep to maximize efficiency.

🔹 Base Fee is the minimum fee you will earn – As pool usage increases, the fee rises dynamically to Dynamic Fee levels.

🔹 BinStep and Base Fee combinations vary, but generally, when a new token is launched, most users will start with larger BinSteps and higher Base Fees, gradually moving to smaller settings over time:

  • BinStep 250 + BaseFee 5% → BinStep 100 + BaseFee 2% → BinStep 80 + BaseFee 1% → BinStep 20 + BaseFee 0.2%

Finding Good Entry Points

Besides choosing a pool with high volume, it’s crucial to find a good entry point.

  • Entering at a price peak with the wrong strategy can result in significant price drawdowns and losses.

❖ Impermanent Loss (IL) – What to Watch For

If you enter a SPOT position with 50% Solana and 50% another token, and the price moves downward, the number of tokens in your position will increase, while the amount of Solana will decrease.

As the token price drops, the total Solana-equivalent value of your position will decline, resulting in impermanent loss.

Understanding these factors can help you maximize returns and manage risks when providing liquidity!

In Other Words…

Even if you earn good fees from a pool, your overall position can still end up at a loss.

🔹 Pay attention to entry and exit points.

❖ Where to Find a Pool?

The easiest and most universal way to find pools is through the Meteora Pools Selector Bot:
🔗 https://t.me/meteora_pools_selector_bot

This bot allows you to customize all parameters (FDV, TVL, Dynamic Fee, Volume, etc.), so you don’t have to spend hours manually searching for pools.
Even if you monitor pools all day, entering the best ones at the right moment can still be challenging when multiple new pools appear at the same time.

Other useful resources:
🔗 https://www.metlex.io/
🔗 https://dexscreener.com/

❖ Analyzing the Pool

If you find a good pool with low TVL and high volume, don’t rush to invest immediately.
It’s crucial to analyze the pool first—especially in quiet market periods, when there are fewer tokens, and many of them don’t last more than a few hours.

A separate article on how to analyze tokens will be published soon!

❖ Ensuring Smooth Transactions

To avoid transaction issues, go to Meteora’s website and change the Priority Level in the top right corner to Turbo or Ultra.

You can also adjust the Liquidity Slippage value to 5%, or even 10% in some cases.

This parameter determines the maximum price shift allowed for the position to be successfully opened.

Useful Links:

Resources:

Meteora Navigator
February 10, 20:11
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