Meteora's reimagined AMM that divides price ranges into discrete bins, charges dynamic fees that rise with volatility, and lets you resize positions without closing them. Built from scratch for Solana's speed and low fees.
See Chapter 10
The ease with which you can buy or sell something without waiting and without moving the price too much. Rice at a pasar is liquid (trades in seconds). A house is illiquid (takes months). In crypto, liquidity is what makes trading instant.
See Chapter 1
The opposite of liquidity — when an asset is hard to trade quickly at a fair price. Your used iPhone takes days to sell. A rare painting takes months. The friction of waiting is illiquidity.
See Chapter 1
A person (or program) that stands in the middle of a market and says: "I will buy from anyone who wants to sell, and sell to anyone who wants to buy — at all times." They hold inventory on both sides and profit from the spread.
See Chapter 2
The price at which a market maker is willing to buy from you. The bid is always slightly lower than the ask — that gap is how the market maker gets paid.
See Chapter 2
The price at which a market maker is willing to sell to you. Combined with the bid, the ask forms the two-sided promise every market maker makes.
See Chapter 2
The gap between the bid price and the ask price. If a market maker buys at Rp 15,800 and sells at Rp 16,200, the spread is Rp 400. This is the market maker's revenue per round-trip trade.
See Chapters 2–3
The danger that the value of what you're holding goes down while you're holding it. Budi's pulsa stock lost value when the provider dropped prices. LPs face this whenever the token they hold declines relative to the other.
See Chapter 3
How many trades happen over a period. More volume with the same spread = more profit. Budi selling 420 vouchers/day at Rp 400 spread makes Rp 168,000. Double the travelers = double the earnings without widening the spread.
See Chapter 3
A computer program that acts as a market maker — holding inventory, setting prices algorithmically, and executing trades 24/7. Instead of Budi standing at a terminal, you have code that never sleeps and never makes emotional mistakes.
See Chapter 4
The foundational AMM formula: x × y = k, where x and y are the amounts of two assets in a pool and k never changes. When someone buys, x goes down so y must go up to keep k constant — automatically raising the price. Middle-school math that launched a trillion-dollar industry.
See Chapter 5
A collection of two assets locked in a smart contract that powers an AMM. The pool is the inventory. Traders swap against it, LPs deposit into it, and the AMM formula keeps it balanced. "Pool" = the shop. "LP" = the person who stocked the shelves.
See Chapter 5
The difference between the expected price of a trade and the actual price you get — because your trade itself moves the price. Buying 1 SOL from a pool with 10 SOL causes a bigger price jump than buying from a pool with 1,000 SOL. Deeper pools = less slippage.
See Chapter 5
You. Someone who deposits their tokens into a pool so the AMM has inventory to trade with. In return, you earn a share of every trading fee. LPing = lending your assets to the pool in exchange for passive income.
See Chapter 6
The income LPs earn from every trade in their pool. If the pool charges 0.3% per trade and you own 10% of the pool, you collect 0.03% of every trade's value. Fees are the LP's salary — the reason anyone provides liquidity in the first place.
See Chapter 6
The LP's hidden cost: when one token's price changes relative to the other, your pool position becomes worth less than if you had just held the tokens separately. It's "impermanent" because the loss only crystallizes if you withdraw. Fees can offset IL — or not.
See Chapter 7
Buying an asset where it's cheap and instantly selling it where it's expensive — pocketing the difference risk-free. Arbitrageurs keep AMM prices in line with the broader market. They're not enemies of LPs; they're the mechanism that keeps the pool honest.
See Chapter 7
The cost to process a transaction on a blockchain. On Ethereum: $5–$50 per trade. On Solana: ~$0.0002 per trade. This 250,000× difference is why small LPs can survive on Solana but get destroyed by fees on Ethereum.
See Chapter 8
A high-speed blockchain with near-zero fees (~$0.0002/tx) and sub-second confirmation. It's the home of Meteora DLMM. Without Solana's speed and cheap transactions, concentrated liquidity strategies would be unprofitable for small LPs.
See Chapter 8
The breakthrough idea: instead of spreading your money across ALL possible prices (from near-zero to infinity), you only provide liquidity in a chosen price range. Same capital, much more fee impact where trading actually happens. 1,000× efficiency gain — but you must manage the range.
See Chapter 9
In concentrated liquidity, the lower and upper price boundaries you choose. Your liquidity is active and earning fees only inside this range. Example: $180–$220 for SOL-USDC. If price moves outside, your position stops earning.
See Chapter 9
When the market price moves outside your chosen price range. Your liquidity stops earning fees and your assets sit idle. You either wait for price to return, adjust your range, or close the position. "Out of range = your money is clocked out."
See Chapter 9
A discrete price step in DLMM's liquidity ladder. Think of a ladder where each rung is a specific price. Your liquidity sits on specific rungs. Inside a single bin, the price is fixed — trades within a bin have zero slippage. Price only moves when a bin is fully drained.
See Chapter 10
The price gap between consecutive bins, measured in basis points (bps). A 20 bps bin step = 0.20% price change between bins. Smaller steps = tighter, more efficient, more management. Larger steps = wider, more forgiving, lower maintenance. 1 bps = 0.01%.
See Chapter 10
The one bin where the current market price sits — and the only bin where trading happens. All other bins are inactive. When the active bin is drained, price moves to the next bin. "Only one rung of the ladder holds weight at a time."
See Chapter 10
DLMM's fee model: base fee + variable surcharge that rises when volatility spikes and decays when markets are calm. Unlike fixed-fee AMMs, DLMM compensates LPs more when they're taking more risk. You earn higher fees during chaos, lower during calm.
See Chapter 11
A "buy at this price or better" / "sell at this price or better" instruction. In DLMM, a single bin above current price (all quote token) acts as a limit sell order. A single bin below (all base token) acts as a limit buy. DLMM merges LPing and limit orders into one.
See Chapter 11
Spread liquidity across a very wide price range (±20–30%). Lowest effort, rarely goes out of range, best for beginners and stablecoin pairs. Tradeoff: lower capital efficiency and lower fee earnings than concentrated strategies. "Set it and forget it."
See Chapter 12
Spread liquidity evenly across a moderate range (±5–10%). Balanced approach: decent fee earnings, moderate maintenance. A solid middle-ground option for actively managed LP positions.
See Chapter 12
Concentrate more liquidity near the current price and progressively less toward the edges. Think of a bell curve. Good when you expect price to hover around current levels. Efficient use of capital near the active zone.
See Chapter 12
Place heavy liquidity at two price points — one below (buy zone) and one above (sell zone) current price. Acts like a market maker's order book. Captures spread on both sides. Higher effort, higher potential returns.
See Chapter 12
Deploy liquidity only in one direction from current price (all above or all below). The 20-bin variant covers a small cluster. High risk, high reward — best when you have a strong directional conviction about where price is going.
See Chapter 12
Your gateway to Solana — a browser extension (or mobile app) that holds your tokens and signs transactions. Phantom, Solflare, and Backpack are the most popular. Your wallet = your keys. Lose your seed phrase, lose everything.
See Chapter 13
A list of 12 or 24 words that is the master key to your wallet. Anyone with your seed phrase can access all your funds. Write it on paper, store it somewhere safe, NEVER screenshot it or store it digitally. "Paper beats pixels."
See Chapter 13
A unit equal to 0.01%. 100 bps = 1%. Used to describe bin steps (20 bps = 0.20% price gap between bins) and fee rates. Small number, big impact — a 5 bps vs 50 bps bin step is a 10× difference in price granularity.
See Chapter 13
Profit and Loss for your LP position. The real question: is your position worth more NOW than if you had just held the tokens? Fees earned minus impermanent loss minus gas costs = true PnL. Don't fool yourself — compare against "just holding."
See Chapter 14
Annual Percentage Rate — your fee earnings annualized. Formula: fees earned this week ÷ position value × 52. A 0.1% daily return = ~36% annualized. APR is a projection, not a guarantee. High APR today might be gone tomorrow.
See Chapter 14
Adjusting your LP position's price range or bin distribution when market conditions change. If SOL's price is heading toward your upper bound, you rebalance before it goes out of range. On Solana this costs fractions of a cent; on Ethereum it costs $8+.
See Chapter 14
Reinvesting your earned fees back into the pool so your position grows — and future earnings are calculated on a larger base. Compound daily = exponential growth. On Solana, you can compound 10 times a day for less than a penny total. On Ethereum, each compound costs $10.
See Chapter 14
A digital dollar — always worth ~$1. The most common quote token in DLMM pools. When you LP SOL-USDC, you're providing SOL (the volatile asset) and USDC (the stable asset). The stable side anchors your position.
See Chapter 5
Solana's dominant DEX aggregator — finds the best swap price across all pools. LP tool: use Jupiter to swap into the tokens you need before depositing. Also useful for checking if you'd get a better rate than your pool's current price.
See Chapters 13–14