What adding liquidity actually does
A liquidity pool holds two tokens side by side, usually your token and SOL. Buyers send SOL
in and take tokens out, sellers do the reverse, and the pool's formula sets the price from
whatever the two balances are at that moment. Raydium's standard pools keep the product of
the two balances constant, so every buy makes the next token a little dearer.
You are the first depositor, so you choose both balances. That is the whole of the
"listing": there is no application, no review and no exchange account. Once the pool
transaction confirms, anyone with a Solana wallet can trade the token on Raydium, and
aggregators such as Jupiter usually route to the pool soon after.
What you need before you start
- The token, in the wallet you will sign with. The pool is funded from that wallet.
- The SOL side of the pool, in the same wallet.
- About 0.495 SOL of fixed costs on Anvilmint: the 0.3 SOL service fee, Raydium's 0.15 SOL pool creation fee and roughly 0.045 SOL of account rent and network fee.
- A decision on authorities. Buyers check mint and freeze authority as soon as a pool appears. Settle them first. Mint authority and freeze authority explain the choice.
The deposit sets the starting price
The opening price per token is the SOL you deposit divided by the tokens you deposit. The
market cap people quote is that price multiplied by the total supply, so it depends on how
much of the supply you put in the pool. With a 1,000,000, token supply and
500,000, tokens in the pool:
The other half of the supply in this example is still in your wallet. Buyers can see that
on any explorer, and a large share held by one wallet worries them more than a low price
does. Decide where the rest of the supply goes before the pool exists.
How far one buy moves the price
A small pool is a fragile price. The table shows how much a single buy raises the price in
each example pool, from the constant-product formula before the pool's swap fee:
In a 1 SOL pool a 1 SOL buy quadruples the price, and the same is true in reverse when that
buyer sells. Deeper pools move less. There is no right size, but if you expect buys of a
given size, the pool needs to be several times larger than them for the chart to look like
a market rather than a coin flip.
Step by step on Anvilmint
- Open Add liquidity and connect the wallet that holds the token and the SOL.
- Paste the token's mint address. Coming from your dashboard or a token page fills it in for you.
- Enter the number of tokens and the SOL to deposit. The form shows the price per token before you sign.
- Check the total. It is your deposit plus the 0.495 SOL of fixed costs.
- Approve one transaction. The pool is created, both sides go in and the 0.3 SOL fee is collected together, so if it fails nothing is charged.
- Your LP tokens arrive in the same wallet, and the success screen links to your token on Raydium.
After the pool exists: LP tokens
LP tokens are the claim on the pool. Whoever holds them can withdraw the deposit, and
removing a pool shortly after people buy is the most common way small tokens go to zero.
Buyers know this, and many check where the LP tokens are before they buy.
- Keep them if you may need the liquidity back. Expect buyers to treat it as a risk.
- Lock them with a time-lock service if you want to promise the pool stays for a set period.
- Burn them if the pool should be permanent. Nobody, you included, can ever withdraw it afterwards.
Anvilmint never holds your LP tokens. They go straight to your wallet, and the decision
stays with you. If you choose to burn them, Burn LP does it in one
signature for 0.2 SOL, and Remove
liquidity withdraws your share if you keep them.
Common mistakes
- A pool too small for the buys it will get. See the table above.
- A price set by accident. Typing the token amount with the wrong number of zeros changes the price a thousandfold. Read the per-token price before signing.
- Creating a second pool. Two pools at different prices split trading and invite arbitrage at your expense. Add to the existing pool instead.
- Forgetting the fixed costs. The 0.495 SOL is on top of the deposit, so a wallet holding exactly the deposit fails.