Meme farming got you tired? Why not try providing liquidity on Meteora instead?
Original Article Title: Putting Your Tokens to Work on Meteora
Original Article Author: Nick Shaheen, Bankless BD Director
Original Article Translation: Ashley, BlockBeats
Editor's Note: This article explores 3 LP strategies on Meteora, including the "Anti-Sawtooth" strategy to reduce impermanent loss through narrow liquidity deployment and frequent rebalancing, the "Hot Potato" strategy to capture short-term trading peaks for quick arbitrage fee gains, and the "Bread'n Butter" strategy using wide spreads and one-sided liquidity provision for long-term stable returns. The author emphasizes the importance of selecting coins wisely and risk management in LP strategies to help users efficiently leverage their funds for earnings within the Solana ecosystem.
The following is the original content (slightly reorganized for better readability):
TL;DR
In the DeFi space, LP is an efficient way to earn yields. Of course, it comes with risks such as impermanent loss and market volatility. This is essentially part of the game, but mastering the right strategy can effectively mitigate risks and enhance returns.
As a leading liquidity management platform on Solana, Meteora offers a range of advanced tools to help LPs optimize their liquidity strategies. How liquidity is deployed efficiently is key to determining profit or loss.

This article will explore three advanced LP strategies suitable for different market conditions:
· "Anti-Sawtooth" Strategy: Targeting high-volatility assets with mean-reverting characteristics.
· "Hot Potato" Strategy: Leveraging short-term trading peaks to maximize fee revenue.
· "Bread'n Butter" Strategy: Reducing impermanent loss through market-adaptive measures.
Before diving into these strategies, it is recommended to read the DLMM and DLMM Multiday Liquidity Management Guide first. Do your homework before diving into high-risk strategies. If you lean towards low-risk operations, you can also choose to deposit USDC on Coinbase, earning approximately 4% in annualized returns.
「Anti-Sawtooth」 Strategy
One of the most common issues during LP is impermanent loss caused by price sawtooth movement. The 「Anti-Sawtooth」 strategy aims to combat this problem by setting a narrow price range and frequently rebalancing the position.
Use Case:
· Suitable for assets that experience frequent volatility but maintain a stable price range in the long term (a characteristic that almost all tokens exhibit today).
· Asset prices typically have high volatility but demonstrate a mean-reverting trend overall.
Implementation Steps:
· Determine the asset's historical trading range: Choose a token that fluctuates within a certain range but does not trend in one direction for a prolonged period.
· Provide liquidity in a narrow range: Use Meteora's concentrated liquidity tool to concentrate liquidity closer to the mid-price to increase fee income.
· Rebalance when the price breaks the range: If the price moves beyond the set range, do not hold onto impermanent loss but adjust the liquidity position promptly.
· Utilize Meteora's automation tools: Reduce manual operations and improve execution accuracy.
「Hot Potato」 Strategy
The 「Hot Potato」 strategy is designed for short-term fee arbitrage, focusing on capturing liquidity fee income during peak trading periods. The core of this strategy is to swiftly enter a pool experiencing a surge in trading volume, earn fees, and exit promptly to avoid impermanent loss from a sharp decline.
Use Case:
· Suitable for Meme coins, airdrops, and other short-term hot assets.
· Ideal for quickly arbitraging during brief spikes in trading volume.
Implementation Steps:
· Monitor high-volume liquidity pools: Use tools like gmgn.ai or dexscreener to track pools with increasing TVL and trading volume.
· Deploying Liquidity During Peak Trading: Ensure high transaction volume to maximize fee revenue.
· Exiting Before Normalizing Transaction Volume: Avoid prolonged exposure to reduce impermanent loss risk.
· Cycling Funds for Increased Efficiency: Rotate funds among multiple short-term hot pools to enhance overall yield.
Risk Warning:
· This strategy is essentially like passing a "hot potato," with funds circulating rapidly. If you notice a shift in market hotspots, make sure to cut your losses decisively and avoid being the last one holding the bag.
「Mainstay」 Strategy (Ole Bread'n Butter Strategy)
The "Mainstay" Strategy is a more robust LP approach that involves setting a wider liquidity range to reduce the need for frequent adjustments while continuously earning fees.
Use Cases:
· Suitable for LP participants looking to reduce management costs.
· Ideal for providing single-sided liquidity, such as offering only SOL or USDC.
Implementation Steps:
· Set a Wide Liquidity Range: Generally set the price range to within -74% of the current price to cope with market volatility.
· Provide Single-Sided Liquidity: Offer only one asset (such as SOL or USDC) to reduce initial exposure to highly volatile assets.
· Choose an Appropriate Bin Step Size: Typically, a bin step size of 100-200 bins is reasonable, allowing the price to fluctuate within a wide range.
· Select Long-Term Bullish Assets: Choose tokens you believe have the potential for future price increases, buy at a low price during price dips, and earn fees simultaneously.
· Regularly Monitor the Market: Although this strategy has lower management requirements, regular checks are still needed to ensure the price does not break out of the set range.
How to Avoid Liquidation
Choosing the right tokens for DLMM (Dynamic Liquidity Market Making) is crucial, often more critical than selecting the right pools. Below are some screening criteria recommended by seasoned Meteora users.
Liquidity Criteria:
· Average trading volume for 1-minute candlesticks should be at least $2K, preferably above $4K.
· In-pool trades should be active, with a maximum trade interval of no more than 20 minutes.
· Preferably migrated from pump.fun for over 6 hours (8 hours for greater stability).
· Market cap should be at least $2M to avoid high volatility risks of low-cap assets.
The above content is for reference only and is not financial advice. Please DYOR, invest cautiously, and never invest more than you can afford to lose.
Conclusion
Utilizing DLMM for LP on Meteora allows you to adapt flexibly to different market conditions.
· The "Sawtooth" strategy is suitable for high volatility, mean-reverting assets, focusing on narrow spread trading.
· The "Hot Potato" strategy is for short-term peak trading, aiming to quickly arbitrage transaction fees.
· The "Staple Food" strategy is more conservative, suitable for long-term LP to reduce management costs.
If you can master and execute these strategies, you can earn fees while reducing downside risk and may even qualify for airdrops. But please proceed with caution, manage risks prudently, and remember—the market is always full of variables.
You may also like

Mastercard Launches Agent Pay for AI, Plans to Record AI Agent Payment Authorizations on Polygon
Mastercard launched Agent Pay for AI, a new payment protocol designed to help AI agents make small payments such as pay-per-use access to data and APIs. The system plans to record human-granted AI agent permissions on Polygon, focusing on verifiable authorization, identity, and payment controls.

Curve Deploys Llamalend v2 on Optimism With 250,000 OP Incentives
Curve launched Llamalend v2 on Optimism with 250,000 OP incentives from the Optimism Foundation. The upgrade expands Llamalend beyond its earlier crvUSD-focused model, adding broader collateral support, LlamaRisk market reviews, and the ability to use Curve LP tokens as collateral.

Raydium Old Liquidity Pool Reportedly Exploited, With $1.34 Million Moved to Ethereum and Tornado Cash
An old Raydium liquidity pool was reportedly exploited for around $1.34 million in USDC, RAY, and wSOL, with the stolen funds bridged to Ethereum and deposited into Tornado Cash. The incident highlights the tail risks of legacy DeFi pools, old contracts, and cross-chain fund laundering paths.

Kalshi Executive Challenges “SBF Backed AI Unicorns” Narrative, Says Leopold Aschenbrenner Was Key Figure
Kalshi executive John Wang questioned the “SBF backed AI unicorns” narrative, saying Leopold Aschenbrenner was the key figure behind major AI investment decisions.

Pantera Capital Partner: How Tokenization is Restructuring the Private Equity and Early Investment Ecosystem?

New York Proposes Stricter Stablecoin Issuer Rules Aligned With Federal GENIUS Act
NYDFS proposed stricter stablecoin issuer rules aligned with the GENIUS Act, covering reserves, custody, redemption timelines, audits, and capital buffers.

Every exchange is a "Universal Exchange."

The counterattack of traditional finance: Alliance chains are quietly reviving

CryptoQuant Says Bitcoin Profitable Supply Is Near 45% Pressure Zone as On-Chain Data Points to Market Repricing
CryptoQuant said Bitcoin’s profitable supply is nearing the 45% pressure zone, signaling rising market stress, unrealized losses, and a possible on-chain repricing phase.

Bitcoin Falls Below 200-Week Moving Average as On-Chain Data Shows Over Half of Supply in Loss
Bitcoin dropped below its 200-week moving average as on-chain data showed over 50% of circulating supply is now in loss, signaling rising market stress.

CFTC Reportedly Plans New Prediction Market Rules Focused on Manipulation Risk and Public Interest Review
The CFTC is reportedly preparing new prediction market rules focused on manipulation risk, public interest review, and retail trader protections.

Meet the new WEEX trial fund—your gateway to greater profits

WEEX Labs Lands at Dutch Blockchain Week: A Disruptive Crypto × AI Conversation Sets Sail in Amsterdam

SK Hynix Reportedly Plans U.S. ADR Listing as Early as August, With SEC Approval Possible in Late June
SK Hynix may pursue a U.S. ADR listing as early as August, with SEC approval reportedly possible in late June amid strong AI chip supply chain demand.

SpaceX vs Tesla vs xAI: Which Elon Musk Trade Has the Biggest Upside in 2026?

OpenAI Reveals It Has Confidentially Submitted an S-1 to the SEC, Keeping the Door Open for a Future IPO
On June 9, according to an OpenAI announcement, the company recently confidentially submitted a draft S-1 registration statement to the U.S. Securities and Exchange Commission (SEC), beginning the preliminary compliance process for a potential initial public offering. OpenAI said it chose to disclose this proactively because it expected the news might leak; however, the company has not yet set a specific listing timeline, and related arrangements may still take some time.

Latest research from 13 top universities including Cornell University: The current state, challenges, and misconceptions of the fusion of Crypto and AI

Deconstructing Anthropic: The Best AI Company, Possibly Also a Type of Organizational Invention
Mastercard Launches Agent Pay for AI, Plans to Record AI Agent Payment Authorizations on Polygon
Mastercard launched Agent Pay for AI, a new payment protocol designed to help AI agents make small payments such as pay-per-use access to data and APIs. The system plans to record human-granted AI agent permissions on Polygon, focusing on verifiable authorization, identity, and payment controls.
Curve Deploys Llamalend v2 on Optimism With 250,000 OP Incentives
Curve launched Llamalend v2 on Optimism with 250,000 OP incentives from the Optimism Foundation. The upgrade expands Llamalend beyond its earlier crvUSD-focused model, adding broader collateral support, LlamaRisk market reviews, and the ability to use Curve LP tokens as collateral.
Raydium Old Liquidity Pool Reportedly Exploited, With $1.34 Million Moved to Ethereum and Tornado Cash
An old Raydium liquidity pool was reportedly exploited for around $1.34 million in USDC, RAY, and wSOL, with the stolen funds bridged to Ethereum and deposited into Tornado Cash. The incident highlights the tail risks of legacy DeFi pools, old contracts, and cross-chain fund laundering paths.
Kalshi Executive Challenges “SBF Backed AI Unicorns” Narrative, Says Leopold Aschenbrenner Was Key Figure
Kalshi executive John Wang questioned the “SBF backed AI unicorns” narrative, saying Leopold Aschenbrenner was the key figure behind major AI investment decisions.
Pantera Capital Partner: How Tokenization is Restructuring the Private Equity and Early Investment Ecosystem?
New York Proposes Stricter Stablecoin Issuer Rules Aligned With Federal GENIUS Act
NYDFS proposed stricter stablecoin issuer rules aligned with the GENIUS Act, covering reserves, custody, redemption timelines, audits, and capital buffers.


