Raydium Launches Permissionless Liquidity Pools

Raydium has introduced permissionless pools to its ecosystem, enabling virtually anyone to have the ability to create tradable AMM pools.

By
Utulu Hope
on
May 25, 2021
Category:
Breaking News

Introduction

Raydium has launched permissionless liquidity pools, the on-chain AMM announced via Twitter on the 24th of May. Permissionless liquidity pools allow users or projects to create AMM pools that are tradable on the platform while providing liquidity to the Serum order book. With the large number of teams now building on Solana, the decentralized finance (DeFi) protocol is excited to open the permissionless feature to the public. With this new feature, many projects will be able to drive liquidity on Raydium and Serum much easier than was possible previously.. 

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One of Raydium’s core objectives over the years has been to drive liquidity to its ecosystem. The platform has focused on this for some time now, and it is the reason for creating an AMM that interacts with Serum’s order book. That said, the permissionless pool launch is the next step towards creating extremely solid liquidity for its community.


Permissionless Pools Explained 

The advantage of a permissionless pool is that it allows anyone to create a liquidity pool on Raydium. As soon as the pool is created, users can trade on the Radium swap interface immediately. The AMM pool will place orders on the Serum order book, ensuring that liquidity is traded on Raydium’s trading page and any other Serum decentralized exchange (DEX). 


How to Create a Permissionless Pool 

In five steps, one can create a permissionless pool on Raydium. 

  • First, create a Serum Market ID. To do this, you will need to read the complete guide provided by the project. Creating a new market on Serum is not free. It costs about 5-15 $SOL. 
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The image above shows the order size and tick size of your new market. According to Raydium's blog page, minimum Tick Size should be a maximum of 0.1% of your starting price for the Base token. In essence, the "Base token starting price is the number of Quote Tokens needed to purchase one Base Token."

  • Next, navigate to the liquidity page on Raydium by clicking the + symbol on the top right-hand corner. 
Creating a Pool Requires Liquidity
  • Go to the create pool page and input your Serum market ID. Then click "confirm." It is should be noted that you cannot use one Serum market ID to open a new liquidity pool (LP) on Radium. If an LP already exists on Raydium for a given Serum market ID, you cannot use the same ID to create a new LP. 
Importing Market ID
  • After creating the pool, set the base token starting price and the initial liquidity of the Base token and the Quote token. Ensure that you have enough funds in your wallet, then click "confirm and Initialize liquidity pool."
Setting Base Token Starting Price

After the confirmation is completed, users will also need to authorize three separate transactions on their wallets. These transactions initialize the pools, create AMM accounts, and add liquidity to their wallets.  

  • Once all three transactions are confirmed in your wallet, Radium will provide you with the new AMM ID along with the newly created LP. 


Swapping on Permissionless Pools 

As long as the pool exists, anyone can swap in it. Users can find these pools either by entering a token's mint address or searching for a Serum Market ID/AMM ID. 

To learn more about swapping with any of the options mentioned above, read the full details here. 


About Raydium 

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Raydium is an automated market maker built on the Solana blockchain. The protocol uses the central order book of the Serum DEX to aid fast trades, liquidity sharing, and many features of yield generation. Users can earn RAY tokens in different ways, from farming liquidity pools to staking. The protocol also intends to create more ways of generating yield in the future, marking an exciting future for the Solana project. 


Closing Thoughts 

Now that the Solana ecosystem is booming, this is yet another brilliant incentive from Raydium for increased adoption. Many projects will look to drive liquidity on Raydium and Serum with the introduction of the permissionless feature. In summary, more projects for Raydium will lead to further adoption of the Solana blockchain. Raydium is shaping itself to compete with the likes of Uniswap and PancakeSwap in terms of relevance, except doing so on the lightning-fast and super-cheap Solana network!

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Utulu Hope

UC Hope is a passionate fan of crypto who could weave the latest event into sparks of inspiration and information. He leaves no stone unturned to get to the core of a story. Aside from writing, he spends his hours poring over algorithms and protocols, preparing for a future career as a computer programmer.