DLMM Overview

Meteora's Dynamic Liquidity Market Maker (DLMM) gives LPs access to dynamic fees and precise liquidity concentration all in real-time.

Meteora's DLMM is based on Trader Joe's Liquidity Book. In our implementation, we organize the liquidity of an asset pair into discrete price bins. Reserves deposited in a liquidity bin are made available for exchange at the price defined for that particular bin. Swaps that happen within the price bin itself would not suffer from slippage. The market for the asset pair is established by aggregating all the discrete liquidity bins.

DLMM LPs earn fees for liquidity provision, dynamic fees during market volatility, and LM rewards where available.

**DLMM is currently in open beta

Features

High Capital Efficiency - DLMM can support high volume trading with low liquidity requirements through the concentrating of tokens at or around the current market value.
Zero Slippage - Swap tokens with zero slippage or price impact within active bin
Dynamic Fees - LPs earn dynamic swap fees during high market volatility to compensate for impermanent loss
Flexible Liquidity - LPs can build flexible liquidity distributions according to their strategies

How it works

Users can select token pairs that they wish to provide liquidity for. For each token pair, they can choose a liquidity shape that best suits their strategies.

Generally:

Spot provides a uniform distribution that is versatile and risk adjusted, suitable for any type of market and conditions.
Curve is ideal for a concentrated approach that aims to maximise efficiency while minimizing impact of volatility
Bid-ask is an inverse Curve distribution, typically deployed single sided for a DCA in or out strategy. It can be used to capture volatility in a stable or pegged pair.

Take note that it is important for LPs to closely monitor their positions and adjust accordingly to market conditions to manage the risk of impermanent loss.

Features

How it works

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