Claiming Fees from Permanently Locked Liquidity

If you are a memecoin or token project that wants to assure traders and your community, you can permanently lock your liquidity (your lose this liquidity forever) in your dynamic pool.

Simply navigate to the "Burn" tab and lock your Meteora LP token in the pool.

After you permanently lock liquidity in the dynamic pool, you can even claim compounding trading fees from your locked liquidity, forever!

Adding liquidity with one address but allowing a different address to claim fees on the permanently locked liquidity

For developers, our Dynamic AMM program allows one address to add liquidity first then send their own Meteora LP token to a different lock token account, so that the ability to claim fees goes to another user's address.

For example, User A deposits liquidity, gets an LP token and permanently sends it to User B's lock token account, so that User B gets to claim the fees forever (not User A).

How do you identify a user's lock token account to transfer the LP token there?

Use this example: https://github.com/mercurial-finance/mercurial-dynamic-amm-sdk/blob/master/ts-client/src/examples/create_pool_and_lock_liquidity.ts#L110

If I have 100 LP tokens, can I send 1 token to 100 different lock accounts?

Yes.

How to verify the fee owner for the fees from perma-locked liquidity in the Dynamic AMM pool?

• Go to the LP mint address on solscan

• Under Holders, select the holder account (not the token account)

• Click Data tab

• Under LockEscrow - JSON, search for owner field and view the address

How are claimable fees calculated from perma-locked liquidity in Dynamic AMM Pools?

We have a merchanism to slowly release locked LP tokens. In Dynamic AMM, fee is compound in LP tokens, so when there are swaps, value of LP token increases.

We use virtual price to define the LP token value:

Virtual price = invariant_d / lp_supply = sqrt(a * b) / lp_supply

Each time a swap occurs, invariant_d (or a * b) will be increased, so the value of LP token increases, and we use that increase in the value of LP token to calculate the fee for user.

Example:

When a user locks LP tokens, we will monitor the virtual price of LP token as v1.

When user claims fee, LP virtual price increases to v2.

That is equal to the fee user should get = total_locked_lp * (v2 - v1)

When translated to LP tokens at this time, we can calculate the amount of LP user can withdraw = total_locked_lp * (v2 - v1) / v2

If the user locks A0 lp_token at the time virtual_price = p0

• Then the invariant is maintained as: Ai * pi = A0 * P0 = constant

• Because pi is increased overtime, so user will be able to withdraw delta_A lp token over time to maintain this invariant