Raydium is Solana's original AMM and still one of its highest-volume DEXes. It combines an order book with AMM liquidity, supports concentrated liquidity (CLMM), and has the deepest farming program on Solana.
Understanding Raydium's Pool Types
Standard AMM Pools — Constant-product x*y=k design. Simple to add liquidity; capital spread across all prices.
CLMM (Concentrated Liquidity) — You choose a price range. Capital efficiency is 5–100x higher than standard AMM, but liquidity goes inactive when price moves outside your range. Requires active management.
CPMM — Newer iteration with improved fee routing. Most new Raydium pools use CPMM.
Adding Liquidity
- Go to raydium.io → Liquidity
- Search for the pool (e.g., SOL/USDC)
- For CLMM: set your price range. Tighter range = more fees when in range, more risk of going out of range
- Deposit equal values of both tokens
- Receive LP tokens representing your share
Gas cost on Solana: under $0.01 per transaction.
Farming RAY Rewards
- After adding liquidity, go to Farms
- Stake your LP tokens
- Rewards accumulate in real-time; harvest RAY manually or auto-compound
APR vs. APY: At 50% APR, compounding weekly brings APY to ~64%. At 10–20% APR, the difference is smaller.
Impermanent Loss on Raydium
IL is unavoidable in AMM pools. If one token appreciates significantly vs. the other, you end up holding less of the winner.
IL rule of thumb:
- Price ratio doubles: ~5.7% IL
- Price ratio 5x: ~25% IL
- Price ratio 10x: ~42% IL
Lower-IL strategies:
- Stablecoin pairs (USDC/USDT) — near-zero IL, lower APR
- Correlated pairs (SOL/mSOL, SOL/stSOL) — minimal IL because prices move together
Raydium vs. Orca
| Feature | Raydium | Orca | |---|---|---| | Pool type | AMM, CLMM, CPMM | CLMM (Whirlpools) | | Volume (2026) | ~60% Solana AMM | ~30% | | Farming rewards | RAY | ORCA | | Order book integration | Yes | No |
For most LPs, both work well. Raydium has more pools and deeper farming incentives; Orca has a cleaner interface for CLMM management.