Creating a CLMM Pool

Similar to developing AMM liquidity pools, Trader AI allows any project team or individual user to create their own Concentrated Liquidity Market Maker (CLMM) pool and farm. Our CLMM pools are tailored for advanced market-making strategies, enhancing capital efficiency for liquidity providers and minimizing slippage for swap transactions. By setting up a farm, project teams can harness community-driven liquidity in a decentralized way, fostering deeper liquidity and more favorable pricing for our users.

Important Considerations for CLMM Pool and Farm Creation on Trader AI:

• Token Selection: Users can select any token from the Solana token list for CLMM pool creation. Each pool is comprised of two types of tokens, typically a base token and a quote token. To avoid redundancy, only one token pair per fee tier is allowed on Trader AI.

• Fee Tiers: We offer four distinct fee tiers:

  • 0.01% for ultra-stable assets

  • 0.05% suited for pegged assets and high-volume pairs

  • 0.25% for a broad range of pairs

  • 1% for exotic pairs

• Starting Price: This is defined as the amount of quote tokens needed to buy one base token.

• Initial Price Range: This represents the price interval where the creator's liquidity is initially allocated upon the pool's inception. The initial liquidity is focused within this range.

• Exclusive Farm Creation: Only the creator of a CLMM pool can establish a corresponding farm. Pool creators can select two different tokens for rewards, with one being mandatory from the pool's token pair and the other being any SPL token. For example, in a RAY-SOL pool, one reward must be either RAY or SOL, and the other can be any token from the Solana Token list.

• Rewards and APR:

  • APR is calculated based on the value of rewards over a period, divided by the pool's liquidity value, and then annualized. This calculation becomes more intricate for Concentrated Liquidity AMMs compared to Constant Product AMMs.

  • In our model, liquidity providers compete for both trading fees and token emissions within the current trading range. Providers with liquidity closer to the mid-price can earn a higher proportion of fees and token emissions.

  • When determining rewards, consider the liquidity near the mid-price, the reward token's price impact on APR, and use Trader AI’s UI for estimated APR calculations across three different scenarios.

  • Once allocated to farms, rewards are final and non-retrievable.

To understand what CLMM liquidity is please watch this video.

Our platform is currently under development and we will be updating the info above with detailed step-by-step guidance on how to use this feature as we progress.