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Wide-to-Narrow Strategy: Orca Fees → Meteora High Volume

The Wide-to-Narrow Strategy is an advanced liquidity provision approach that combines the best of both worlds: passive wide-range positions on Orca (no rent costs) with active narrow-range positions on Meteora (higher volume, dynamic fees). This strategy builds on the LP Flywheel by systematically redeploying fees from low-maintenance positions into high-yield opportunities.

🎯 The Core Concept​

The Problem:

  • Orca: Great for wide ranges ($120-$280 for SOL/USDC) with no rent costs, but volume can be lower
  • Meteora: Higher volume and dynamic fees, but wide ranges cost significant SOL in rent - making passive wide positions impractical

The Solution:

  1. Start Wide on Orca: Open a wide-range position (e.g., SOL/USDC $130-$280) that requires minimal maintenance
  2. Earn Fees: Let the position accumulate fees over weeks/months
  3. Harvest & Deploy Narrow on Meteora: Use accumulated fees to open narrow, high-volume positions on Meteora where rent costs are manageable

This strategy leverages each protocol's strengths while avoiding their weaknesses.

📊 Why This Works: Volume Comparison​

Solana DEX Volume Comparison

As shown in the Solana DEX volume data, Meteora consistently processes significantly more volume than Orca:

  • Meteora: $376M+ in 24h volume, $9.2B+ in 7-day volume
  • Orca: $129M in 24h volume, $2.3B in 7-day volume

Higher volume = more trading fees for LPs. However, Meteora's rent structure makes wide positions expensive, while Orca allows wide positions with no additional rent beyond initial setup.

🏗️ How It Works: Step-by-Step​

Phase 1: Build Your Base on Orca​

Goal: Establish a passive income stream with minimal rent costs

  1. Choose a Wide Range: For SOL/USDC, a range like $130-$280 works well for passive strategies

  2. Deposit Liquidity: Add SOL and USDC to your Orca Whirlpool position

    • Orca charges minimal rent (~0.07-0.14 SOL for first-time tick arrays, refundable)
    • No ongoing rent costs for range width

  3. Let It Run: Monitor occasionally, but don't stress about daily rebalancing

    • Wide ranges reduce the risk of going out of range
    • Fees accumulate automatically in your position

Expected Yield: ~20-25% APR on average for wide SOL/USDC ranges (varies with market conditions)

Phase 2: Harvest Fees and Deploy on Meteora​

Goal: Convert accumulated fees into high-volume, narrow positions

  1. Claim Fees from Orca: Withdraw accumulated fees from your Orca position

    • Fees are automatically added to your position value
    • You can withdraw fees by partially withdrawing liquidity

  2. Choose Narrow Range on Meteora: Select a tight range around current price

    • Example: If SOL is at $150, choose $145-$155 (narrow range)
    • Narrow ranges on Meteora have manageable rent costs (unlike wide ranges)
    • See our Meteora guide for detailed setup instructions

  3. Understand Bin Step: This is critical for Meteora strategy

    • Bin Step = The price difference between consecutive bins (price points)
    • Smaller bin step = More bins per dollar = More volume capture, but smaller max range
    • Larger bin step = Fewer bins per dollar = Less volume, but wider max range possible
    • For narrow ranges, you can use smaller bin steps to maximize fee capture
    • See Meteora's bin step documentation for details

  4. Deposit on Meteora: Use your harvested fees to open the narrow position

    • Rent costs for narrow ranges are reasonable (typically 0.1-0.5 SOL)
    • Dynamic fees mean you earn more during volatile periods

Expected Yield: 30-100%+ APR on narrow ranges during high-volume periods (varies significantly with volatility and volume)

🔧 Understanding Bin Step on Meteora​

Bin Step is a fundamental concept for Meteora DLMM that directly impacts your strategy:

What is Bin Step?​

Each bin represents a single price point, and bin step is the difference between two consecutive bins. Bin steps are calculated based on basis points set by the pool creator.

Example: If SOL/USDC is $150 and bin step is 25 basis points (0.25%):

  • Bin 1: $150.00
  • Bin 2: $150.00 × 1.0025 = $150.38
  • Bin 3: $150.38 × 1.0025 = $150.75
  • And so on...

How Bin Step Affects Your Strategy​

Bin Step SizeVolume CaptureMax RangeBest For
Smaller (e.g., 1-10 bps)✅ Higher (more continuous price range)❌ Smaller (limited bins per position)Narrow ranges, stable pairs
Larger (e.g., 25-100+ bps)❌ Lower (less continuous)✅ Larger (more bins per position)Wide ranges, volatile pairs

For the Wide-to-Narrow Strategy:

  • On Orca (Phase 1): You don't need to worry about bin steps - Orca uses ticks, not bins
  • On Meteora (Phase 2): Choose pools with smaller bin steps for narrow ranges
    • Smaller bin steps = more bins in your narrow range = better volume capture
    • Since you're using narrow ranges anyway, you can maximize volume with smaller bin steps
    • The max # of bins per position is 1,400, so with smaller bin steps, you can still cover a meaningful price range

Key Insight: For narrow, high-volume positions, smaller bin steps are your friend. They allow you to capture more trading volume while keeping rent costs reasonable (since you're using a narrow range).

💰 Real-World Example​

Scenario: You have $10,000 to deploy

Month 1-3: Build Base on Orca​

  • Deposit: $10,000 in SOL/USDC on Orca
  • Range: $130-$280 (wide, passive)
  • Rent Cost: ~0.1 SOL (one-time, mostly refundable)
  • Fees Earned: ~$500-625 over 3 months (assuming 20-25% APR)
  • Maintenance: Minimal - check monthly

Month 4: Harvest & Deploy on Meteora​

  • Harvest: $500 in fees from Orca position
  • Deploy on Meteora: $500 in narrow SOL/USDC position
  • Range: $145-$155 (narrow, around current price of $150)
  • Bin Step: Choose pool with smaller bin step (e.g., 5-10 bps) for better volume capture
  • Rent Cost: ~0.2 SOL (reasonable for narrow range)
  • Expected Yield: 40-80% APR during high-volume periods

Ongoing Strategy​

  • Orca Position: Continues earning ~20-25% APR passively
  • Meteora Position: Requires more monitoring (narrow range), but earns higher yields
  • Reinvest: As Meteora position earns fees, you can:
    • Add to existing Meteora position
    • Open additional narrow positions
    • Reinvest back into Orca for more passive income
    • Take profits

⚖️ Trade-offs & Considerations​

Advantages​

✅ Best of Both Worlds: Passive income from Orca + high yields from Meteora
✅ Capital Efficiency: Wide Orca position doesn't tie up capital for rent
✅ Volume Capture: Meteora's higher volume means more fees
✅ Dynamic Fees: Meteora's dynamic fee system rewards volatility
✅ Flexibility: Can adjust strategy based on market conditions

Disadvantages​

❌ Active Management: Meteora narrow positions require monitoring
❌ Rent Costs: Even narrow Meteora positions cost SOL in rent
❌ Out-of-Range Risk: Narrow positions can go out of range quickly
❌ Complexity: Managing positions on two protocols adds complexity
❌ Gas Costs: More transactions = more SOL spent (though minimal on Solana)

When to Use This Strategy​

Good for:

  • LPs who want passive income but are willing to actively manage high-yield positions
  • Those comfortable with Solana's low fees enabling frequent rebalancing
  • LPs who understand both Orca and Meteora mechanics
  • Strategies where you want to compound fees into higher-yield opportunities

Not ideal for:

  • Completely passive LPs who don't want to monitor positions
  • Those uncomfortable with managing multiple protocols
  • Very small capital amounts (rent costs become proportionally larger)
  • LPs who prefer simplicity over optimization

🔗 Related Resources​

📝 Summary​

The Wide-to-Narrow Strategy is a sophisticated approach that:

  1. Starts with passive wide positions on Orca - No rent costs, minimal maintenance, steady income
  2. Harvests fees systematically - Builds a capital base from passive income
  3. Deploys narrow positions on Meteora - Captures high volume with dynamic fees, manageable rent costs
  4. Leverages bin step selection - Uses smaller bin steps for narrow ranges to maximize volume capture

This strategy requires active management of Meteora positions but rewards you with higher yields while maintaining a passive income stream from Orca. It's perfect for LPs who want to optimize their capital efficiency across Solana's top DEXes.

Remember: Always do your own research, understand the risks (impermanent loss, smart contract risk, out-of-range positions), and start with smaller positions to learn the mechanics before scaling up.