Meteora DAMM v2 explained

How the pool works

Liquidity providers deposit both tokens, or one token from a price they set. Each trade changes the ratio of the two tokens in the pool, and the price with it. A pool's liquidity can cover every price, or sit between two prices chosen when the pool is made, which makes trading inside that range deeper.

Positions

Liquidity sits in positions, and each position is an NFT in the wallet that holds it. A position can be locked for good, so it can never be withdrawn but keeps earning fees, or vested so it unlocks over time. Positions can be split, merged and sent to another wallet.

Fees

• A base fee from 0.01% to 99% per trade.
• A fee scheduler: the fee can start high and fall over time after launch, or fall as the price grows.
• An optional dynamic fee that rises while the price swings sharply.
• Fees collected in both tokens, in the quote token only, or with part of each fee added back to the pool's liquidity.
• Meteora keeps 20% of every fee; the rest goes to the positions, in proportion to their liquidity.

Launch controls

• An activation time: the pool can exist before trading opens, so everyone starts together.
• Support for Token-2022 tokens, including ones that charge a transfer fee.

DAMM v2 and bonding curves

Meteora's Dynamic Bonding Curve graduates tokens into a DAMM v2 pool: the quote token the curve raised and the tokens set aside become the pool's liquidity, split into positions for the creator and the platform.

Using it with no code

On T-minus, a plain pool is a DAMM v2 pool set up in one form, and Manage handles its positions afterwards: claim, add liquidity, lock, split, merge or send.

Questions