Trade, swap, and earn with Raydium

Time10 minutes
Reward$1 in SOL

What is Raydium?

Raydium is what you call an automated market maker, or AMM for short. For clarity, let’s split it into two parts.

A market maker is what the name suggest; it creates a market. Let’s say there is Trader A and Trader B. Trader A has $24,000 (price of BTC at the time) and Trader B has 1 BTC. Trader A is currently looking to trade his $24,000 for 1 BTC. A market maker ensures that there is a trader, in this case Trader B, who is willing to 1 BTC for $24,000. A market maker hosts the process required to provide liquidity for trading pairs, in this case the 1 BTC and $24,000, on centralized exchanges (a middleman is in charge of the exchange).

Now, by automating this phenomenon, you get an automated market maker. AMM, in turn, allows of DEXs to exist (decentralized exchange). By automating every transaction, it removes the need of having a middleman takes time and money for every transaction. In this case, the website that you are making the transaction is the middleman. Since the website is automated, every transaction is almost instantaneous.

Raydium is different from other AMM DEXs and DeFi protocols, as it offers fast/cheap transactions, a central order book for ecosystem-wide liquidity, and a trading interface. This is due to Raydium being based on Solana, a naturally fast blockchain, and having access to the Serum DEX, a DEX built on Solana.

What we’ll do in this tutorial

We will be going through, step by step, how to get started on Raydium. 

1. Go to the Raydium Website

Go to this link to get started. 

Then, click on the Launch App button.

2. Connect Wallet

On the right-hand corner, there should be a button which says connect wallet. Click it.

Choose the Phantom button

Approve any signatures, and you should be good to go!

3. Explore!

Explore the Raydium website, as it offers a number of fascinating features like:

  • Farm
  • Trading
  • Swap
  • Pools
  • AcceleRaytor (project funding)

Get started and trade some tokens!

4. Adding Liquidity

We’ll work on adding liquidity to pools through Raydim / Serum. This is a more advanced concept to gasp, so please read below directly from the Radium documentation. We highly recommend reading this guide – it is incredibly useful and thorough.

Thank you to the Radium team for the below

Raydium's liquidity pools allow anyone to provide liquidity by adding their assets to a pool.

How to add liquidity to a pool:

  • 1. Navigate to the 'Liquidity' tab on the app and connect your wallet.
  • 2. Select the tokens you wish to add to the liquidity pool. You must add liquidity to the pool in the form of two tokens at a 1:1 ratio according to USD value. Enter the amount of the first coin you wish to add, the second coin will adjust to match a 1:1 ratio. Then click 'Supply'. You will then need to approve the transaction in your wallet.
  • You should see a confirmation for the transaction. You should now be able to view your LP tokens in your wallet balance.
  • You have now successfully added to Raydium's liquidity pool. If you wish to reclaim your tokens, simply click 'Remove Liquidity' and confirm the transactions.
  • That's it, you're now a liquidity provider on Raydium!

5. Liquidity Pool Explanation

The below explians liquidity pools on Raydium, again via the Raydium team and documentation!

  • When you add to a pool you will receive Liquidity Provider tokens (LP tokens). For example, if a user deposited $RAY and $USDC into a pool, you would receive RAY-USDC RLP tokens. 
  • These tokens represent a proportional share of the pooled assets, allowing a user to reclaim their funds at any point. 
  • Every time a user swaps between $RAY and $USDC, a 0.25% fee is taken on the trade. 0.22% of that trade goes back to the LP pool. 0.03% of that goes to RAY staking.
  • Previously, if there were 100 RLP tokens representing 100 USDC and 100 RAY, each token would be worth 1 USDC & 1 RAY. 
  • If one user trades 10 USDC for 10 RAY, and another traded 10 RAY for 10 USDC, then there would now be 100.022 USDC and 100.022 RAY.
  • This means each LP token would be worth 1.00022 USDC and 1.00022 RAY now when it is now withdrawn.

6. Claim your reward! 🎁

You've completed the required steps, and it's time to get paid! The final step is submitting a reward claim so we can verify you've completed the tutorial.

Click the “Claim Reward” button at the top of the page.

Fill in the address of the wallet you used for this tutorial.

Submit the form and wait!

We’ll confirm that you have added liquidity on Raydium and send over $1 of SOL as a reward!