What LP strategy to use? Prioritizing fees is most lucrative in terms of earning points but you’ll need to find out yourself what strategy you like best. For the sake of this guide I’ve limited it to 5 basic strategies of pairings you can use on the DLMM’s.
Stable coin pairing
If you wanna hold stables -> Pairings such as USDC-USDT. They’re both stable coins so you’re almost risk free, unless one of them depegs but that’s very unlikely imo
Pro: Super low risk, very minimal management needed.
Con: Almost no fees at all, this is mainly to get points for your TVL.
SOL pairing
If you wanna hold SOL -> Pairing with a LST such as INF-SOL or jupSOL-SOL. Price moves really similar to each other with the LST’s trading at a premium but overall you can LP these in a tight range.
Pro: Super low risk, very minimal management is needed.
Con: Almost no fees at all, this is mainly to get points for your TVL.
High marketcap SPL
High market cap SPL’s such as JUP, JLP, PYTH, WIF etc.
More active managing needed since the tokens have lower correlation in price action. Depending on the time you have during the day to manage the LP’s you can either take a smaller or larger range.
Pro: Medium risk, fees are decent.
Con: More risk at IL, more time needed to manage, more knowledge of LP’s needed.
Established meme coins
Meme coins that have been around for some time which you are fairly comfortable with holding and knowing that they won’t rug.
Some of my favorites; POPCAT, NUB, PUPS.
Pro: Fees are good.
Con: Volatile price action -> Even more risk at IL, even more time needed to manage, more knowledge of LP’s needed.
New meme coins (just released, very low mcap)
Really low market cap, low liquidity and freshly released coins. Be very careful with these since the price action is really volatile and they could go from 100 to 0 real quick. I would not recommend this if you don’t have much experience yet.
Pro: Fees are great.
Con: Really volatile price action -> Even more risk at IL, even more time needed to manage, more knowledge of LP’s needed.
TLDR
The higher the market cap the higher the liquidity -> lower fees.
The lower the market cap lower the liquidity -> higher fees but be aware of the risks.
The smaller the range -> the more fees/TVL you’ll get but also will take more active management.
The larger the range -> less fees/TVL.
