# Trade FAQ
#### Basics
What is a swap?
A swap exchanges one token for another using Raydium's onchain smart contracts. No intermediary, no custody—you trade directly against liquidity pools.
Exchange rates are calculated by the pool's formula based on available liquidity.
Where does the liquidity come from?
Raydium's own liquidity pools. The routing engine automatically finds the best path across multiple pools to minimize slippage and get you the best price.
How do tokens get listed?
Raydium is fully permissionless—anyone can create a pool and list a token. Always verify the contract address before swapping.
***
#### Fees
What are the swap fees?
Swap fees range from 0.01% to 4% depending on the pool type and configuration.
| Pool type | LPs | RAY buyback | Treasury |
| --------- | --- | ----------- | -------- |
| AMM v4 | 88% | 12% | — |
| CPMM | 84% | 12% | 4% |
| CLMM | 84% | 12% | 4% |
What are network fees?
Solana charges fees to process transactions. Expect fees of \~0.0001–0.001 SOL per transaction.
| Fee type | Amount | Description |
| ------------ | ------------ | ----------------------------------------------------------------- |
| Base fee | 0.000005 SOL | Fixed cost per transaction (50% burned, 50% to validator) |
| Priority fee | Variable | Optional fee to increase your transaction's priority in the queue |
Raydium's UI shows recommended priority fee tiers (low, medium, high) based on recent network activity. You can adjust this in settings.
Higher fees don't guarantee inclusion—they improve your odds during congestion. Most swaps land fine with default settings.
***
#### Price & slippage
What is price impact?
The difference between the market price and your execution price, determined by your trade size relative to pool liquidity.
Bigger trade = more impact.
If you see high price impact, try a smaller amount or find a deeper pool.
What is slippage tolerance?
The maximum difference between your expected price and execution price. If the price moves beyond your tolerance, the swap fails.
Set it via the gear icon on the swap page.
* Too high = risk of bad execution
* Too low = failed transactions
***
#### Perpetuals
Raydium Perpetual routes orders to Orderly, check out their [documentation](https://orderly.network/docs/build-on-omnichain/building-on-omnichain) for details.
What is funding rate?
Funding fees are periodic payments exchanged between long and short positions. This mechanism keeps the perpetual price close to the underlying spot price.
* **Positive funding rate:** Longs pay shorts
* **Negative funding rate:** Shorts pay longs
Funding is peer-to-peer—no fees are collected by the exchange.
**Settlement:** Every 8 hours at 00:00, 08:00, and 16:00 UTC.
**Important notes:**
* During extreme volatility, funding intervals may be shortened to 4h, 2h, or 1h
* Each market has its own funding rate caps and floors
* If you hold positions across multiple funding periods, these payments can materially affect your PnL
For the full funding rate formula, see [Orderly's documentation](https://orderly.network/docs/introduction/trade-on-orderly/perpetual-futures/funding-rate).
What is initial margin and maintenance margin?
**Initial Margin Ratio (IMR)** is the collateral required to open a position. It determines your maximum leverage (max leverage = 1 / Base IMR). For larger positions, required margin increases—the bigger your position, the lower your effective leverage.
**Maintenance Margin Ratio (MMR)** is the minimum margin required to keep a position open. If your account falls below this, liquidation triggers.
| Market | Base IMR (max leverage) | Base MMR |
| --------- | ----------------------- | -------- |
| BTC-PERP | 1% (100x) | 0.6% |
| ETH-PERP | 1% (100x) | 0.6% |
| SOL-PERP | 1% (100x) | 0.6% |
| Most alts | 10% (10x) | 5% |
**Account Margin Ratio** = Total Collateral Value / Total Position Notional
A higher margin ratio means lower risk. With no open positions, margin ratio defaults to 100%.
For details, see [Orderly's documentation](https://orderly.network/docs/introduction/trade-on-orderly/perpetual-futures/margin-leverage-and-pnl).
What is liquidation?
Liquidation occurs when your Account Margin Ratio falls below the Maintenance Margin Ratio. The exchange closes your position to prevent further losses.
**Example:** You have $1,000 USDC and open a $10,000 BTC position (10x leverage).
* Account Margin Ratio = 10%
* BTC-PERP MMR = 0.6%
* If losses push your margin ratio below 0.6%, liquidation triggers
**To avoid liquidation:**
* Monitor your Account Margin Ratio
* Add collateral
* Reduce position size
* Set stop-loss orders
What is PnL settlement?
PnL settlement moves your profit or loss from perpetual positions into your withdrawable balance.
* Your displayed balance already includes unsettled PnL
* Settlement is required to **withdraw** profits
* Settlement has no impact on your margin ratio or open positions
***
#### Troubleshooting
Why did my transaction fail?
| Issue | Solution |
| ----------------- | --------------------------------------------- |
| Insufficient SOL | Keep at least 0.05 SOL for network fees |
| Slippage exceeded | Increase slippage tolerance |
| Timeout | Transaction didn't land—increase priority fee |
What are versioned transactions?
A newer transaction format that enables advanced swap routing. Most wallets support it by default.
If you're using a Ledger and seeing errors, update your Solana app in Ledger Live and re-enable blind signing.
***
#### Tokens
What is wrapped SOL?
wSOL is SOL wrapped for use in smart contracts—redeemable 1:1 for SOL.
If a swap leaves you with wSOL, go to [raydium.io/swap](https://raydium.io/swap) and it'll prompt you to unwrap automatically.
Are tokens on Raydium wrapped?
Some are. wBTC and wETH are wrapped via Wormhole's Portal bridge. Other tokens may use different bridges.
Always verify the mint address—if unsure, ask in [Discord](https://discord.com/invite/6EvFwvCfpx) or [Telegram](https://t.me/raydiumprotocol).
***
#### Support
Still have questions?
Join [Discord](https://discord.com/invite/6EvFwvCfpx) or [Telegram](https://t.me/raydiumprotocol) for 24/7 support.