The first AMM built on Solana is Raydium. We would like to introduce you and guide you on how to use Raydium step-by-step, including how to swap, add/remove liquidity, farm, stake/unstake RAY tokens, and trade on Raydium.
Raydium is a decentralized exchange (DEX) built on the Solana blockchain platform that uses an AMM mechanism to build out the order book center of Serum (DEX) in order to increase transaction speeds, share liquidity and provide more features for yield farming.
Analyzing Raydium Exchange #
Raydium has the following advantages over other decentralized exchanges:
- It executes more transactions than Ethereum with very low gas fees thanks to Raydium’s Solana Blockchain.
- Raydium allows access to the entire Serum ecosystem, including the command line and liquidity.
- The Raydium transaction interface allows you to view TradingView charts, place limit commands, and manage your transactions.
However, the downside is that the process of transferring your assets to this exchange is quite complex.
Create a Solana Wallet (SOL&SPL) #
Solana wallets (SOL&SPL) are required to use Raydium. By following the instructions below, you can create a Solana Wallet (SOL&SPL) or restore a wallet from another platform to your wallet after you’ve downloaded or updated it:
If you want the Solana Wallet to be automatically updated as well as the new wallets that are available on this version, import your Multi-chain Wallet again.
It is important to remember that in order to trade on Raydium, no matter what currency you use… You must transfer your assets into the SOL&SPL wallet.
Preparing SOL as transaction fees #
Raydium uses SOL as transaction fees. Therefore, you must have SOL Coins to do anything on Raydium.
Centralized exchanges, such as FTX or Binance, allow you to buy SOL that you can then transfer to your wallet. You can find out which exchanges support Coingecko’s SOL.
The coin must be transferred to the correct blockchain before the transaction can take place.
Now that you have prepared everything, let’s get started.
Raydium Exchanges can be used on any web browser #
Access to Raydium’s website: raydium.io. Then select Launch App.
Raydium’s swapping process is similar to other DEXs, but it is much faster and cheaper.
Step 1: Select the Swap tab at the top of the website.
Step 2: Click on Connect Wallet at the top right corner * select your wallet from the list.
Then choose Connect to confirm.
Step 3: To complete the transaction, you will need to provide the following information:
To trade a token, choose from the list: the USDT/RAY pair is shown in this example. Swapping other tokens is as simple as selecting the related tokens.
The 4th step is to adjust the amount you want to trade. Select Swap.
Step 5: Click Sign to confirm the transaction.
The system will display a message at the lower right corner of the screen after processing successfully after a few minutes.
- By clicking the symbol on the upper right corner of the screen, you can adjust the Slippage Tolerance level according to your needs. 2% is the default setting here. It is possible to trade with the default slippage or adjust the slippage to ensure the highest success rate.
- The information displayed on the screen should be read carefully before trading, such as the amount that you expect to receive and the price impact (the difference between the market price and the estimated price provided by Raydium).
- Switching between buying and selling positions is done by clicking on the arrow in the middle of the trading interface. Before you make a transaction, make sure that it is safe.
- You can review your balance to check the trades or you can check instantly at SolScan by visiting: solscan.io after a successful swap.
- Swap on Raydium will fulfill your order up to the worst price and cancel the rest, unlike Swap on Ethereum where the transaction is automatically cancelled if the price is higher than the acceptable slippage.
Step 1: Select the Trading tab on the website.
Step 2: Choose Connect Wallet at the right corner. Click Connect.
Step 3: Execute the transaction
Choose the transaction pair that you want, such as SOL/USDT, RAY/USDT, SRM/USDT, etc. Depending on the token pair, choose the appropriate trade format:
- Limit orders allow users to set the price at which they want to purchase or sell an asset
- A market order allows users to quickly buy at the lowest sell price and sell at the highest buy price at the time specified by the order.
Select the trading price as the limit or the market price:
- You set the limit price for limit orders.
- The price at the time of setting the order is the market price applied in the market limit.
Select the amount you want to buy:
- The total money you will pay = Limit Price/ Market price * Amount.
- The system will display the Wallet Balance related to the token pair you select for this position.
Step 4: Click Buy/Sell order like trading on the other exchange. Your linked wallet will be connected and you will be asked to sign to confirm the order.
- Limit Order will be executed only when the market price reaches the limit price you set. If the market price doesn’t reach there, the limit order will remain pending.
- When the order is matched, all tokens will be transferred to the wallet and updated to the balance.
Add Liquidity #
Choose the Pools tab at the top of the website. Perform the connecting process as I have instructed in the Swap section.
Choose the pool and token pair you want to add liquidity to, or search for them.
Raydium recently announced the Permissionless Pool, which allows projects to freely create liquidity pools on Solana. Therefore, there may be a lot of “scams” or “pump/dump” projects.
The trading pair SOL-USDT on Raydium Pool will be used as an example. Go to the main screen and click SOL-USDT.
The final step is to decide how much you want to supply. The system will automatically calculate the other amount once you have entered the amount of one coin/token.
Step 4: Verify information and select Supply.
Click Sign to confirm the transaction.
When you have successfully added liquidity, you will see the message ‘Liquidity added’. Your balance will now show LP tokens.
You simply have to select ‘Remove Liquidity’ and confirm the transaction to reclaim the token.
- By adding a token/coin to the pool, you will receive Liquidity Provider tokens (LP tokens). When you deposit RAY and USDC into the pool, you will receive a RAY-USDC RLP token representing your part in the pool. You will be able to reclaim the token at any time.
- Users will be charged 0.25% as a transaction fee every time they trade the RAY/USDC pair, including these fees:
- The LP pool will receive 0.22 percent of the fee.
- 0.03% of the fee will go to RAY staking.