Depositing into an imbalanced pool / pool with price out of sync

Dynamic pool

The ratio of tokens in the dynamic pool determines the price of the tokens in the pool.

As a liquidity provider, it is important that you check that the pool price is in sync with the broader market price or your deposit will be impacted by arbitrage trades, causing you to incur a loss.

For example, as a pool creator for a SOL/USDC pool when the current market price is 1 SOL = 100 USDC, you would need to add 100 USDC for every 1 SOL you add to the pool. If you only added 50 USDC for every 1 SOL, this differs from the market price and you can lose money as arbitragers take advantage of your low SOL price by buying your SOL at a cheaper rate and selling it on another DEX at market rate, profiting from the difference.

DLMM pool

Sometimes, the initial price in the DLMM pool may not be in sync with the broader market price, especially when it was just created with a wrong initial price and has low liquidity.

As a liquidity provider, it is important that you check that the pool price is in sync with the broader market price or your deposit will be impacted by arbitrage trades, causing you to incur a loss.

LPs can first sync the pool price with market price before adding liquidity, to avoid the risk of loss due to arbitrage trades.

The "Sync with market price" feature is only available for out of sync DLMM pools:

  • With 0 liquidity between the active bin and the market price bin, or

  • With liquidity in a bin that's close enough to the market price bin.

If there's already liquidity in bins between the active price bin and market price bin, but those bins aren't close enough to the market price, "Sync with market price" won't be available.

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