Raydium Defi Yield Guide !
Raydium is an automated market marker (AMM) on Solana that uses the secret sauce order book Serum to provide liquidity and earn yields. There are tons of Dex on Solana and most are very similar to each other. You can see others here. For demonstration purposes, I'm going to use Radium as is it very user friendly and this guide is meant to help newbies who may be intimidated by defy.
Step 1: Get a wallet! I will be using Phantom Wallet. If you need help setting up Phantom, please see these Instructions.
Step 2: Go to https://raydium.io/ and click Launch App
Step 3: Connect the wallet you wish to conduct business with. Enter your PW and choose “connect”. Your wallet address should populate in the top right and you will need some Solana in it for gas.
** Now would be a good time to briefly explain all the tabs on the left. We’ll go in order top to bottom. Trading will open up a dex where you can place limit orders on the RAY token.
Swap tab will open up an interface where you can swap any Solana token for any other token of your choosing, this will be important when choosing which liquidity pair you want to support. You need an equal value of each token to provide a pair.
Pools tab you can scroll or search for all the Liquidity pairs that Raydium currently provides and an estimated APR per desired time frame. Always DYOR, but if an APR is outrageous like 958,512.19% per month, there is probably some rug stuff going on. Also note that pools will pay out the APR in various tokens so be sure to get paid in something you are interested in having.
Farms tab is similar to pools where you provide a liquidity pair. The main difference is that all the farms pay out in the native raydium token.
Staking tab allows you to stake your RAY tokens.
AcceleRaytor tab is a launchpad for new Solana projects, very speculative but can be lucrative if you are lucky and make some savvy choices.
Back to that sweet Yield guide!
Step 4: Choose a pool or farm pair. DYOR, but I would recommend a pair that moves tightly together or two that you are intimately familiar with both tokens. I'm going to do USDC and Samo for the guide because I happen to have a bit of each already.
Step 5: Swap in such a way that you have the same dollar amount of each token. You will need an equal amount to add liquidity. Do the math, click swap, and authorize the transaction.
Step 6: Add liquidity in the liquidity tab. Select the 2 tokens you chose and click add liquidity and confirm the transaction. That’s it! You have provided some defi liquidity and are earning some sweet APR. I'm going to let it sit in the pool for a while. It is 8/12 I added 727.84 Samo @ .0163772 and added 11.92 USDC @ 1 and the pool is @16.72 % for 7Days I'll come back in a week or so and show you how to unstake.
Step 7: OK its been 4 days. I want to wait longer, but I got some work things coming up and I am way to excited about my defy guide. Go to the pool tab and click “show staked” for the pair you chose.
Step 8: Click the little minus icon to remove liquidity... your pair should now be in your wallet. When I removed my liquidity, it was 8/15 and Samo was about $00.0161 , while the USDC remained stable @ 1.
Step 10. Check out all the degenerate internet dog money you made!
Math 727.84 x .0163772= $11.92 of Samo + 11.92 USDC= $23.85
Math 741.55 x .0158047= $11.72 of Samo + 11.72 USDC= $23.44
As you can clearly see I'm quitting my 9 to 5 cause I'm rich....wait a sec, I lost money?
Yep, Samo increased in value roughly 11% and then decrease in value about 3.5% from when I entered and exited my liquidity pair. Impermanent loss is beyond the scope of this article. But it is the reason I mention to get choose 2 tokens that move tightly together.
So why would I do this?
Defi pools are risky and crypto is already thrilling enough. I would not recommend going full defi degen unless you really know what you are doing and even then don't commit your whole bag. But liquidity pools are an incredibly interesting concept and some pools like USDC/USDT with a 5-8% annual raydium payout is low risk/high reward if you are super bullish on the RAY token. It is also a good way to really get involved in the ecosystem and perhaps identify that next hot token.
Thank you for reading my post, if you enjoy this content, consider checking out my website. It contains various links to referral bonuses and my current side projects.
As always, tip yourself big.
