What is Raydium?

What is Raydium?

What is Raydium?

…and how do you make money on it?

Dapps & Protocols

·

10 min

What is Raydium?

…and how do you make money on it?

Dapps & Protocols

·

10 min

What is Raydium?

…and how do you make money on it?

Dapps & Protocols

·

10 min

What is Raydium?

…and how do you make money on it?

Dapps & Protocols

·

10 min

What is Raydium?

DeFi has been one of the hottest topics in the crypto world, offering a range of innovative financial services and opportunities for users to access decentralized and permissionless financial systems. Among the many blockchain networks that have emerged to support DeFi, Solana has been gaining significant momentum. Raydium is one DeFi protocol that capitalizes on Solana's capabilities to offer a seamless trading experience. 

To explain Raydium protocol, it’s important to mention that its general mechanisms apply to every other dapp. Raydium is made out of a collection of smart contracts governed by the community.

Smart contracts are automated pieces of code that mediate the interaction between a user and the dapp. Whenever you interact with Raydium, crypto tokens always remain in your possession. In order to access the protocol, users have to manually approve the smart contracts. You can think of it as a bot that performs the action you agree with based on a strict set of rules. This is an important difference compared to traditional finance, where the money is placed with a third party.

With smart contracts, there is no risk of a person running away with users’ money, or ever worse, locking up the money for any reason. Furthermore, anyone can access Raydium regardless of their geography, political views, or religion — Raydium doesn’t require KYC.

Transparency and decentralization are powerful tools to enable a thriving DeFi ecosystem. With the traditional limitations out of the way, an important question arises: “How does Raydium become self-sustaining?”


Raydium mainly derives its value being the main DeFi hub on Solana. In exchange for the service provided, Raydium receives a small fee that goes into maintaining the protocol. Upon consulting with the community, core developers are usually in charge of implementing the protocol upgrades. This ensures Raydium stays safe from hacks and the protocol adapts to the market conditions.

As the number of transactions increase, the fees quickly add up. A portion of these fees goes into the protocol treasury, which pays for the developers, audits, and future products.

The Raydium treasury is secured by a multisig that is being held by the core team and key members of the Raydium DAO. The development team aims to eventually transition to on-chain governance, giving the Raydium DAO complete control of protocol parameters.

The open nature of DeFi encourages protocols to cooperate and innovate. Raydium is a unique protocol that has been in the making since early 2021. However, the protocol can be vulnerable to hacks and exploits. As easy as it is for developers to review each others’ code, hackers can just as easily spot a vulnerability and take advantage of it. 

The code is publicly available to verify. Those who are tech savvy can audit the code for themselves and see precisely what the smart contracts do. Less technical users can indirectly assess the safety of Raydium protocol based on audits and reports issued by technical community members. Raydium has been audited by Runtime Verification and runs bug bounties to patch potential vulnerabilities.

Despite its careful analysis, Raydium went through a security incident on December 16, 2022. Somehow, the attacker managed to gain control of an admin pool private key. The team does not know how this key was obtained, but it suspects that the virtual machine that held the key became infected with a trojan program.

Once the attacker had the key, they called a function to withdraw transaction fees that would normally go to the DAO’s treasury to be used for buybacks of RAY. And just like that, the attacker got away with over $2M worth of crypto.

To cover the gap, the team used its own unlocked RAY tokens to compensate RAY holders who lost their tokens due to the attack. In response to the exploit, the team has upgraded the app’s smart contracts to remove admin control over the parameters that were exploited by the attacker.

How does Raydium work?

Raydium offers a trading experience similar to centralized exchanges thanks to integration with an order book. The protocol is an AMM at its core, and with the addition of an order book, means users and liquidity pools have access to the order flow and liquidity of the entire Serum ecosystem, and vice versa.

Apart from this feature, the experience on Raydium is straightforward. Users can swap, farm and provide liquidity at lighting speeds with cheap fees.

Raydium Concentrated Liquidity

In 2022, Raydium launched Concentrated Liquidity (CLMM) pools, which improve liquidity depth around the current price and translate to better prices for traders. Liquidity providers in CLMM pools provide liquidity within a specific price range, increasing the proportion of fees earned on actively traded liquidity. 


For sophisticated users and market makers, this means capital can be deployed more efficiently to earn a higher share of fees and rewards, while also improving prices for traders. However, liquidity providers should be aware that actively monitoring positions and market fluctuations is critical to mitigating the potential for increased impermanent loss.

For projects and communities looking to drive liquidity for a token, permissionless CLMM pools and farms enable even more control over incentivizing liquidity.

How to make money on Raydium?

Making money on Raydium is no different than any other DeFi protocol. All you need is a Solana wallet and some crypto that you can put to work.

One of the benefits of using Raydium is that users gain instant access to every asset on Solana. By providing liquidity, users have a relatively safe way to earn passive income on their idle crypto assets.

Without further ado, let's dive in!

Raydium Concentrated Liquidity Pools

Concentrated liquidity pools allow you to select a specific range at which to liquidity is active for traders within a pool. Instead of earning fees for the aggregated liquidity used within a liquidity pool, users earn the fees for their specific selected range.

For example, let's take the price of SOL at $20. If you want to earn more in fees, you can set your concentrated liquidity at $18 and/or $25. If the price of SOL hits any of these targets, you will immediately earn the trading fees for the selected range. This may offer exponentially more profits form trading fees until the other LPs adjust. As long as the price of SOL stays out of your selected range this means no trading fees. Therefore, one should offer liquidity at difference price levels to draw fees regardless of price movement.


To provide concentrated liquidity on Raydium, follow these steps:

1. Open the Raydium app

2. Select ‘Concentrated’ on the left navigation bar

3. Set the price range for the position

4. Enter the deposit amounts for each token (you have to offer 50/50 of each token to complete an LP position)

5. Click "Preview" and click "Deposit"

6. Confirm the transaction

7. Profit

Your position will be displayed as an NFT in your wallet. Liquidity can be added or removed from an existing position, however if you want to adjust the price range, you will need to create a new position.

Raydium Liquidity Pools

Adding liquidity is one of the simplest operations to do on a AMM like Raydium. In doing so, you are entitled to a portion of the trading fees. When you add to a pool you will receive LP tokens. For example, if a user deposited $RAY and $USDC into a pool, you would receive RAY-USDC RLP tokens. These tokens accumulate the trading fees and can be exchanged for the underlying assets (plus earned fees) at any time.


To provide liquidity on Raydium, follow these steps:

1. Open the Raydium app

2. Navigate to the 'Liquidity' tab

3. Select the tokens you wish to add to the liquidity pool

4. Confirm the liquidity guide

5. Confirm the transaction

6. Profit!

Raydium Farms

The concept of farming is just like adding liquidity, but it comes with extra tokens besides the trading fees. The token rewards are paid in RAY, which can be sold on the open market or staked for even more returns. In order to farm on Raydium, you need to have an open LP position and stake the LP tokens in one of Raydium's farming pools.


To farm on Raydium, follow these steps:

1. Open the Raydium app

2. Navigate to the "Farms" tab

3.  Click the pair you wish to farm. On the right side, click on the '+' to add liquidity to the pair.

4.  Click 'Start Farming' under the pool you would like to farm

5. Approve the transaction

6. Profit!

Raydium Staking

If you already hold RAY tokens, staking can be a great way to earn even more RAY tokens.


To stake RAY, follow these steps:

1. Open the Raydium app

2. Navigate to the "Staking" tab

3. Enter the amount of tokens you wish to stake, then click 'Stake'

4. Confirm the transaction

5. Profit

Price Prediction for Raydium — Can it hit $1000?

Buying and hodling RAY — the native token of Raydium— is one way of potentially making money on Raydium.

By looking at its current price, it’s natural to think about the chance of RAY hitting $1000 per token. This can happen sooner, or way in the future, and is determined by a couple of ever changing factors.

Let’s examine the potential growth of the RAY token by analyzing its tokenomics. RAY’s current market cap sits comfortably at ${MARKET_CAP}. With {CIRCULATING_SUPPLY} RAY tokens being in circulation today, that means a price of {PRICE} per RAY.

How did we come to that calculation? It’s quite easy, the price of a RAY token is equal to its current market cap divided by the number of tokens in circulation. Dividing ${MARKET_CAP} by {CIRCULATING_SUPPLY} gives us a result of {PRICE} for each RAY coin. 

By changing the order in the simple formula above we can use it to calculate other things as well. This helps us a lot because we can deduce the market cap of RAY at different token prices. Then, we can use the result to compare it to the current state of the network and see what would be required for RAY to hit that price.

At a price of $1000 per token, that means the current market cap of RAY would equal ${{CIRCULATING_SUPPLY} * 1000}. Remember that we arrived at this number by multiplying the amount of circulating tokens by $1000.

Now let’s shift our attention to the fully diluted market cap.

Some blockchains may have their tokenomics built in a way that only a small percentage of tokens are circulating at the beginning. This can be misleading because we don’t have the full picture and only take into account the current number of coins released in the market.

The fully diluted market cap represents the total value of a coin if all tokens were in circulation. RAY’s whole supply of tokens is {MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} RAY which means that no more coins above that number will ever be created.

These tokens are not created at the discretion of a specific entity. They are created automatically by the network to reward different actors that keep it secure.

How does this impact the price of RAY? Taking into account the current price of a RAY token, that would result in a fully diluted market cap of ${MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY * PRICE}. RAY coins that have been burned are not taken into consideration because they have been permanently removed from circulation.

Whether it seems gigantic or not, the number we came to above only takes into account the current price of a RAY token. Doing the same calculation but with a price of $1000 gives us a result of ${{MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} * 1000} for the RAY protocol fully diluted market cap.

These are all crucial details to know when calculating if RAY can reach the price of $1000 per token. If the diluted market capitalization is way too high, the token has little room left to grow. Blockchains in general have no cap on the value they can reach, whether that number seems possible it’s totally up to you.

The future of RAY depends solely on its growth as a network used by tens and hundreds of millions of users.

If you’re looking to add some RAY to your portfolio, the most trusted places to get some are Binance and Coinbase.


Ultimate Web3 Automation

A lil' more goodness

What is Arrakis Finance?

Dapps & Protocols

·

21 min

What is Saber Finance?

Dapps & Protocols

·

21 min

What is Balancer?

Dapps & Protocols

·

21 min

What is Status?

Dapps & Protocols

·

21 min

What is MuesliSwap?

Dapps & Protocols

·

21 min

What is Across Protocol?

Dapps & Protocols

·

21 min

What is SushiSwap?

Dapps & Protocols

·

21 min

What is Velodrome Finance?

Dapps & Protocols

·

21 min

What is Pangolin?

Dapps & Protocols

·

21 min

What is Metal?

Dapps & Protocols

·

21 min

What is Golem?

Dapps & Protocols

·

21 min

What is Orca?

Dapps & Protocols

·

21 min

What is Compound?

Dapps & Protocols

·

21 min

What is ROOK?

Dapps & Protocols

·

21 min

What is Mango?

Dapps & Protocols

·

21 min

What is Harvest Finance?

Dapps & Protocols

·

21 min

What is Enzyme?

Dapps & Protocols

·

21 min

What is Origin Protocol?

Dapps & Protocols

·

21 min

What is Frax Finance?

Dapps & Protocols

·

21 min

What is BENQI?

Dapps & Protocols

·

21 min

What is OpenSea?

Dapps & Protocols

·

21 min

What is iExec?

Dapps & Protocols

·

21 min

What is Yearn Finance?

Dapps & Protocols

·

21 min

What is Toros Finance?

Dapps & Protocols

·

21 min

What is LooksRare?

Dapps & Protocols

·

21 min

What is Elk Finance?

Dapps & Protocols

·

21 min

What is Yield Yak?

Dapps & Protocols

·

21 min

What is Quickswap?

Dapps & Protocols

·

21 min

What is Pool Together?

Dapps & Protocols

·

21 min

What is Multichain (Anyswap)?

Dapps & Protocols

·

21 min

What is Thales?

Dapps & Protocols

·

21 min

What is Crabada?

Dapps & Protocols

·

21 min

What is Timeswap?

Dapps & Protocols

·

21 min

What is Abracadabra Money?

Dapps & Protocols

·

21 min

What is Sudoswap?

Dapps & Protocols

·

21 min

What is Injective Protocol?

Dapps & Protocols

·

21 min

What is Mixin?

Dapps & Protocols

·

21 min

What is 0VIX Protocol?

Dapps & Protocols

·

21 min

What is Swaap Finance?

Dapps & Protocols

·

21 min

What is BurgerCities?

Dapps & Protocols

·

21 min

What is Lyra?

Dapps & Protocols

·

21 min

What is Solend?

Dapps & Protocols

·

21 min

What is Mean Finance?

Dapps & Protocols

·

21 min

What is The Graph?

Dapps & Protocols

·

21 min

What is AAVE?

Dapps & Protocols

·

21 min

What is Gods Unchained?

Dapps & Protocols

·

21 min

What is Synthetix?

Dapps & Protocols

·

21 min

What is Gelato?

Dapps & Protocols

·

21 min

What is JustStable?

Dapps & Protocols

·

21 min

What is Aavegotchi?

Dapps & Protocols

·

21 min

What is RociFi?

Dapps & Protocols

·

21 min

What is Perpetual Protocol?

Dapps & Protocols

·

21 min

What is Linear Finance?

Dapps & Protocols

·

21 min

What is 0x Protocol?

Dapps & Protocols

·

21 min

What is Monolith?

Dapps & Protocols

·

21 min

What is Keep Network?

Dapps & Protocols

·

21 min

What is Dune Analytics?

Dapps & Protocols

·

21 min

What is Holochain?

Dapps & Protocols

·

21 min

What is Gnosis Safe?

Dapps & Protocols

·

21 min

What is StakeDAO?

Dapps & Protocols

·

21 min

What is 1Inch?

Dapps & Protocols

·

21 min

What is Angle Finance?

Dapps & Protocols

·

21 min

What is Magic Eden?

Dapps & Protocols

·

21 min

What is Pickle Finance?

Dapps & Protocols

·

21 min

What is dYdX?

Dapps & Protocols

·

21 min

What is Ellipsis Finance?

Dapps & Protocols

·

21 min

What is Decentraland?

Dapps & Protocols

·

21 min

What is Convex Finance?

Dapps & Protocols

·

21 min

What is Dfyn?

Dapps & Protocols

·

21 min

What is Rocket Pool?

Dapps & Protocols

·

21 min

What is Shiba Inu?

Dapps & Protocols

·

21 min

What is MakerDAO?

Dapps & Protocols

·

21 min

What is Penguin Finance?

Dapps & Protocols

·

21 min

What is Akropolis?

Dapps & Protocols

·

21 min

What is Francium?

Dapps & Protocols

·

21 min

What is Storj?

Dapps & Protocols

·

21 min

What is Saffron Finance?

Dapps & Protocols

·

21 min

What is Adamant Finance?

Dapps & Protocols

·

21 min

What is SundaeSwap?

Dapps & Protocols

·

21 min

What is Synapse?

Dapps & Protocols

·

21 min

What is Reserve?

Dapps & Protocols

·

21 min

What is Alchemix?

Dapps & Protocols

·

21 min

What is Ankr?

Dapps & Protocols

·

21 min

What is Apricot Finance?

Dapps & Protocols

·

21 min

What is Trader Joe?

Dapps & Protocols

·

21 min

What is Router Protocol?

Dapps & Protocols

·

21 min

What is Alpaca Finance?

Dapps & Protocols

·

21 min

What is Index Coop?

Dapps & Protocols

·

21 min

What is API3?

Dapps & Protocols

·

21 min

What is Band Protocol?

Dapps & Protocols

·

21 min

What is Hop Protocol?

Dapps & Protocols

·

21 min

What is Port Finance?

Dapps & Protocols

·

21 min

What is Augur?

Dapps & Protocols

·

21 min

What is Aragon?

Dapps & Protocols

·

21 min

What is BadgerDAO?

Dapps & Protocols

·

21 min

What is Uniswap?

Dapps & Protocols

·

21 min

What is Cometh?

Dapps & Protocols

·

21 min

What is Request Network?

Dapps & Protocols

·

21 min

What is Chainlink?

Dapps & Protocols

·

21 min

What is TrustSwap?

Dapps & Protocols

·

21 min

What is Set Protocol?

Dapps & Protocols

·

21 min

What is MeanFi?

Dapps & Protocols

·

21 min

What is Saddle Finance?

Dapps & Protocols

·

21 min

What is Axie Infinity?

Dapps & Protocols

·

21 min

What is Serum?

Dapps & Protocols

·

21 min

What is Bonfida?

Dapps & Protocols

·

21 min

What is Atlendis Protocol?

Dapps & Protocols

·

21 min

Stay in the loop

No spam, just certified good stuff

Stay in the loop

No spam, just certified good stuff

Stay in the loop

No spam, just certified good stuff

Stay in the loop

No spam, just certified good stuff

Stay in the loop

No spam, just certified good stuff