Solana
Solana is a high-speed Layer 1 blockchain purpose-built for scalable DeFi. Its ultra-low transaction costs and sub-second finality make it a favorite among traders and bots - which, in turn, means consistent fee opportunities for liquidity providers.
This guide covers how LPing works on Solana and walks through the major protocols where you can earn: Orca, Meteora, and Raydium. Note: Lifinity is winding down and no longer accepting new deposits.
⚙️ Solana at a Glance
- Block time: ~400ms
- TPS (real-world): 2,000+
- Avg. transaction cost: < $0.001
- Smart contract language: Rust
Solana’s parallel processing and optimistic concurrency model make it ideal for high-throughput, real-time DeFi strategies - but also require LPs to understand fast-moving market dynamics.
🧠 Why LP on Solana?
- Low Cost: LPing on Solana is nearly free - which is crucial for adjusting ranges or rebalancing frequently.
- High Frequency: Fast blocks and lots of bot activity mean more trades and, potentially, more fees.
- Modern AMM Designs: Solana is home to concentrated liquidity (Orca, Meteora), hybrid AMM/orderbook models (Raydium), and dynamic liquidity market makers (Meteora DLMM). Note: Lifinity (proactive market maker) is winding down.
🐟 Where to LP on Solana
| Protocol | Model | Key Features |
|---|---|---|
| Orca | Concentrated Liquidity (Whirlpools) | Efficient capital use, UniV3-style LPing |
| Meteora | Dynamic Liquidity Market Maker (DLMM) | Dynamic fees, bin-based, single/dual-sided LPing |
| Raydium | Constant Product AMM + Orderbook | Deep pools, older pairs, passive-friendly |
| Lifinity | Proactive Market Maker (PMM) | ⚠️ Winding down - Withdraw assets by Dec 31, 2026 |
🌀 Orca
Orca’s Whirlpool model offers concentrated liquidity, similar to Uniswap V3. You choose a price range, and only earn fees when trades occur within it. Tight ranges mean higher yield - and more risk.
- Fee tiers: 0.01%, 0.05%, 0.3%, 1%
- Best for: Active LPs who can monitor price trends
- Rewards: Many pools have ORCA or partner token incentives
⚡ Meteora
Meteora's DLMM (Dynamic Liquidity Market Maker) uses a bin-based system with dynamic fees that adjust based on volatility. LPs can deposit single-sided or dual-sided liquidity within customizable price ranges.
- Dynamic fees: Base fee + volatility-based component
- Bin-based system: Configurable bin steps for different volatility levels
- Best for: LPs who want dynamic fee structures and flexible deposit options
- Features: Price sync tool, volatility strategies, single-sided deposits
🧬 Raydium
Raydium uses a constant product AMM design, but integrates with Solana's orderbook system for deeper liquidity. It's passive-friendly and hosts many legacy pairs.
- Fee: ~0.25% per trade
- Best for: Long-term LPs and set-and-forget positions
- Routing: Trades often routed through Raydium via aggregators
🌊 Lifinity ⚠️ Winding Down
Lifinity is winding down. If you have assets on Lifinity, withdraw them immediately before December 31, 2026. See the full Lifinity guide for details.
Lifinity was a proactive market maker that quoted trades based on oracles and internal modeling. LPs could deposit a single asset like USDC and earn over time based on market-making activity.
- Low IL risk: Oracle pricing + PMM math reduced impermanent loss
- Non-traditional model: No manual rebalancing or dual-token exposure
- Status: Protocol is winding down - withdraw all assets by December 31, 2026
📊 Strategy Snapshot
| Protocol | Active or Passive? | Risk of IL | Rebalancing Needed | Status |
|---|---|---|---|---|
| Orca | Active | High (tight range) | Yes | ✅ Active |
| Meteora | Active/Passive | Medium-High | Yes (if narrow) | ✅ Active |
| Raydium | Passive | Medium | Minimal | ✅ Active |
| Lifinity | Passive | Low | None | ⚠️ Winding down |
⚠️ Risks to Watch
- Volatility: SOL and DeFi token prices move quickly. Impermanent loss is real.
- Protocol risk: Smart contract bugs or governance changes can affect LPs.
- Fragmentation: Solana has many protocols - LPing in low-volume pools can mean low or zero returns.
🧰 Tools & Analytics
- Birdeye
- Step Finance
- Lifinity Dashboard ⚠️ Withdraw assets by Dec 31, 2026
- Jupiter Portfolio
🧭 TL;DR
Solana is fast, cheap, and ideal for both active and passive LPs. Whether you're narrowing a Whirlpool range on Orca, using dynamic fees on Meteora, or sticking with tried-and-true pools on Raydium, Solana's DeFi scene offers flexibility and real earning potential - just keep your eye on volatility and pool depth.
Note: Lifinity is winding down. If you have assets there, withdraw them before December 31, 2026.