What is Memecoin Pool v2?
Last updated
Last updated
Memecoin Pool v2 (or "Meme pools") is a pool with a Fee Scheduler. They are meant to better support memecoin launches and liquidity.
A memecoin-type DAMM v2 pool has a few unique features specially suited for memecoins:
Ability to claim fees from permanently-locked liquidity: The liquidity you add during pool creation will be permanently locked forever to help raise community confidence, but you can still earn and claim fees on your locked liquidity.
Fee Schedule: Dynamic Fee is set by the protocol and by default ranges from 50%-0.25%. This fee may be changed by the protocol over time to optimize for different market conditions.
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.
Note: Currently, only the memecoin-type DAMM v2 Pools have a Fee Schedule. 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 v2, fees are still claimable by the liquidity provider (the wallet that provided the liquidity).
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.
Fees earned by the liquidity provider are determined by the Fee Schedule set by the protocol and by default ranges from 50%-0.25% of each swap through the pool. This fee may be changed by the protocol over time to optimize for different market conditions.
20% of the LP 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 v2. However, if the Memecoin Pool v2 is being launched with an Alpha Vault, SOL or USDC must be used as the quote token.