Dynamic Memecoin Pools
Last updated
Last updated
Meteora has launched a new subset of dynamic pools called "Memecoin pools" (or "Meme pools") to support memecoin launches and liquidity.
Create a new Memecoin Pool here: https://app.meteora.ag/pools/create
A memecoin-type dynamic pool has a few unique features specially suited for memecoins:
Permanently-locked liquidity with claimable fees: The liquidity you add during pool creation will be permanently locked forever to help raise community confidence, but you can still earn fees on your locked liquidity.
Dynamic Fee: Dynamic Fee is set by the protocol and ranges from 0.15%-15%. This fee may be changed by the protocol over time to optimize for different market conditions. In addition, LPs earn lending yield from the locked SOL and USDC in the pool.
Protocol Fee: 20% of the Dynamic Fee is allocated as a Protocol Fee. This Protocol Fee goes to the Protocol or to integrators and trading bots that bring volume to the pool.
Tracked by data analytics and trading platforms: Similar to other dynamic pools, memecoin pools are also tracked by Birdeye, DEXScreener, and DEXTools, and trading platforms such as Jupiter. This improves memecoin discoverability by traders, bots, and LPs.
Option to be the first to buy the memecoin: When creating a new Memecoin Pool via the UI, creators have the option to be the first to buy some of their memecoin to help protect against sniper bots acquiring a large portion of the supply at the earliest prices.
Note: Currently, only the memecoin-type Dynamic AMM Pools have Dynamic Fee. And only the Meteora team is able to change these fees; projects have no backend access.
Memecoin projects permanently lock liquidity to give traders confidence. However, on most DEX platforms, fees earned by this liquidity are lost, limiting a project's financial options.
On Meteora, when a liquidity provider creates a new memecoin pool, the liquidity provided is automatically sent to a lock token account to be permanently locked. Fees and yield are still claimable by the liquidity provider (the wallet that provided the liquidity) forever.
By allowing creators to earn fees from locked liquidity, a creator can choose to lock up more or all of the supply and earn fees by growing volume instead of selling allocations as a source of funding. We believe this will help more memecoins improve and grow over the long-run by creating long-term alignment between projects and holders.
If the project wants to permanently lock liquidity in the Memecoin pool, they should ideally lock the liquidity BEFORE the pool starts trading, so that swap fees from locked liquidity are captured the second trading starts.
In a scenario where:
The pool started trading - t0
Liquidity gets deposited to the pool by the project, but not locked - t1
Subsequently, that liquidity is permanently locked by the project - t2
The project will not be able to claim swap fees earned from t1 to t2 (since fees from t1 to t2 are assigned to the LP token before the LP token was permanently locked).
The project will only be able to claim swap fees from locked liquidity starting from t2.
Fees earned by the liquidity provider are determined by the Dynamic Fee set by the protocol and ranges from 0.15%-15% of each swap through the pool. This fee may be changed by the protocol over time to optimize for different market conditions.
Fees collected are also added back to the pool and auto-compound, so the longer you wait to claim the fees the faster your earnings will grow!
Only the Meteora team is able to change the Dynamic Fee.
Lending Yield
Additionally, memecoin creators that use memecoin pools can earn from both swap fees and lending yield.
As Memecoin pools (and other dynamic pools) are integrated with our dynamic vaults, the locked SOL or USDC portion in the pools are dynamically sent to external lending protocols for lending yield. When trading volume drops, creators will still be able to earn lending yield from their locked USDC or SOL in their pools. Lending yield also auto-compounds.
20% of the Dynamic Fee is allocated as a Protocol Fee that goes to the Protocol or integrators or trading bots that bring volume to the memecoin pool. This helps grow the Meteora Treasury or incentivize more integrations with Meteora and consequently increase volume to the pool. The remaining 80% goes to the memecoin pool creator / LPs.
Only the Meteora team is able to change the Protocol Fee.
No constraint on the quote token for a Memecoin Pool. However, if the Memecoin Pool is being launched with an Alpha Vault, SOL or USDC must be used as the quote token.
Thanks to Dialect's Blink feature, memecoins launching on Meteora are able to generate referral blinks (blockchain links) on their pools to share across the internet. The aim is to drive volume to the meme pools by incentivizing influencers, KOLs, or meme creators themselves to share the referral blink with their community.
Both creators and referrers will instantly share the fees from any trading that happens on these Blinks. Blink referrers get the some volume referral fee if swaps occur on the meme pool using the blink, while creators (the liquidity providers) get the remaining LP fee.
Example:
A memecoin pool is created and has an LP fee of 15% of the swap value
20% of this LP fee is awarded to the volume referrer, in this case the blink referrer
So if a user swaps using the referred blink, the referrer earns 20% of 15% = 3% fee from the swap
Remaining 80% of 15% = 12% goes to liquidity providers
Note: Blink feature is only available for the memecoin-type of dynamic pools.
