Pool types overview

Understanding the different pool types on Raydium

Raydium liquidity primitives leverage robust and audited open-sourced smart contracts developed by Raydium. All Raydium pools can be created directly on the UI using the following guides, interacting with Raydium SDK, or by Cross program invoke (CPI). There are two main types of liquidity pools on Raydium:

Concentrated liquidity:

CL pools allow for asymmetric liquidity provision. Pool creators and LPs can provide liquidity in their preferred price range, granting them more granularity in designing their liquidity strategy.

This pool type is more capital efficient as it enables more depth around the current price, it usually is preferred for less volatile assets or more advanced users.

While it is possible to replicate a full range position on CL pools, its emulation will be more expensive as it requires several tick array initiations.

Raydium concentrated liquidity pools support several fee configs from 1bps to 200bps, as well as some token22 extensions, and anchor builds.

Constant product pools (CL):

Constant product pools follow the distribution XY=K. Extremely versatile and easy to use, this has been the most used pool type for price discovery since 2021. Raydium has two programs for CP pools:

1. Constant product MM (CPMM): Raydium's latest iteration of constant product pools. CPMM pools are anchor-compatible, support token 22, and several fee configs.

2. AMMv4 (Hybrid AMM): Raydium legacy constant-product pools. It is the most distributed contract on Solana. Often referred to as the hybrid AMM, this contract previously shared idle liquidity to a Central limit order book (Serum, then OpenBook). Today all pools function as a traditional AMM.

🤔 Great, but how do I choose?

• The price discovery for my digital asset has not happened yet.

• I anticipate a lot of volatility.

• I want to deposit on a full-range liquidity position.

Any of the above? Use a constant product pool.

• My asset is already live on different exchanges and I'd like more depth around the current price.

• I want to provide an asymmetric amount of base and quote tokens.

• I would my pool to get integrated by an automated liquidity manager like Kamino or Krystal.

Any of the above? Use a concentrated liquidity pool.

• I want to use Burn & Earn.

• My token has a token22 extension.

• I want to choose the fee config of the pool.

Any of the above? Either use a CLMM or CPMM pool.