💧 How to add liquidity on Raydium
How to make a token tradable and choose a sensible pool.
Why liquidity is needed
A newly created token exists on-chain, but does not automatically have a market. To allow users to buy and sell it, you need a liquidity pool. The most common pool on Solana is TOKEN/SOL.
Without a pool, the token can be sent between wallets, but is not easily tradable.
What is a liquidity pool
A liquidity pool is a reserve of two assets deposited in a smart contract. In the TOKEN/SOL case, you deposit a quantity of your token and a quantity of SOL. The ratio between these two assets creates the initial price.
Initial price
The initial price depends on how much token and how much SOL you deposit.
Simple example: 500,000,000 tokens and 1 SOL. That ratio determines the theoretical initial price.
If you deposit more SOL relative to tokens, the initial price will be higher. If you deposit many tokens and little SOL, the initial price will be lower.
What to prepare first
Before creating the pool, make sure you have: the correct mint address, token in your wallet, SOL for liquidity, extra SOL for fees, logo and metadata already set up, public official links, a message for the community.
Do not create the pool if the token is not ready to be seen.
Creating the pool
General process:
- open Raydium
- go to the liquidity section
- choose create pool
- paste the mint address
- choose SOL as the second asset
- enter token quantity
- enter SOL quantity
- check the ratio
- confirm with Phantom
Low liquidity
With low liquidity: price moves very easily, slippage can be high, small purchases can pump the chart, small sales can destroy it, perceived risk is high.
Higher liquidity
With more liquidity: price is more stable, token looks more serious, users have more trust, easier to sustain volume.
Removing liquidity
Removing liquidity is possible, but is one of the most delicate actions. If the community sees liquidity disappear, it can interpret it as a rug pull. Communicate clearly before doing it.
Conclusion
The liquidity pool is the moment when the token goes from a created asset to a tradable token. It is one of the most important steps of the launch. Prepare it carefully, because it influences price, trust, volume and project perception.