The meme wave is not just about PVP; "mining" is also a good option

Author: Fu Ruo, Odaily Planet Daily

As the craze for meme coins continues to heat up, many investors find themselves trapped in the short-term volatility of the PVP model. This high-risk market attracts those seeking quick returns but also exposes most to significant volatility risks. For investors who prioritize stable returns, participating in liquidity provision (LP) is becoming a path worth exploring.

To this end, Odaily will focus on analyzing two LP platforms—Raydium and Meme Farmer—to help investors discover stable profit opportunities within the meme wave.

Raydium: The Liquidity Engine of the Solana Ecosystem

Raydium is the largest decentralized exchange (DEX) on the Solana network, accounting for about 60% of the total trading volume on Solana DEX, according to Dune data.

Raydium's liquidity is closely related to the issuance of meme coins. It is not difficult to find that most liquidity pools for meme coins on the GMGN platform are provided by Raydium. The main reason is the collaboration between the Pump.Fun platform and Raydium. As the engine for meme coins on Solana, Pump.Fun provides initial liquidity support when the market capitalization of meme coins reaches a certain scale, and the liquidity pools are attributed to Raydium. This results in about 90% of the trading volume of meme coins generated by Pump.Fun being concentrated on Raydium, reinforcing its dominant position in the meme coin market.

As shown in the figure below, most meme-related LPs yield over 1000%. Compared to the "hit and kill" strategies on-chain, larger investors may be more willing to provide liquidity to earn returns.

Currently, Raydium offers three different types of pools: standard AMM pools (AMM v4), constant product exchange pools (CPMM), and concentrated liquidity pools (CLMM).

Each type of pool has different fee standards, generally divided into trading fees, pool creation fees, buyback fees, and treasury fees.

However, meme coin liquidity providers should be aware that high volatility may lead to impermanent loss, causing a decline in the value of LP. It is recommended to provide LP for leading projects in different segments of meme coins. The APY returns are slightly lower compared to other new memes, but the risks are relatively controllable.

Meme Farmer: Underpinned by Raydium, Community-Driven, Not Yet Audited

In addition to Raydium, many KOLs on social media have recently promoted Farmer.Meme. This platform is a yield platform specifically designed for the meme economy, offering smart LP strategies and innovative ways to help users achieve returns. Its core features are as follows:

• Smart LP Management: The platform provides intelligent LP strategies to help users easily optimize returns.
• Permissionless Pool Creation: Users and project parties can independently create concentrated liquidity pools (CLMM) or constant product pools (CPMM) and inject liquidity into these pools to earn corresponding returns.
• Ecosystem Rewards: The platform allows project parties to enhance the returns of liquidity providers through incentives, attracting more funds to participate.
• Fair Launch: Farmer.Meme emphasizes that the platform is entirely driven by community users and project parties, avoiding the involvement of venture capital.

Farmer.Meme incentivizes liquidity providers by issuing BRRR tokens. This token adopts an inflationary model with no fixed supply limit. The platform charges a 10% fee on user earnings, of which 50% is used to buy back BRRR tokens and send them to the treasury to support the platform's long-term stability.

Currently, some LP yields on Farmer.Meme are as follows:

It is worth noting that most pools on Farmer.Meme use concentrated liquidity pools (CLMM), and the yields are not as high as shown in the figure. Testing shows that the daily yield from liquidity mining on Farmer.Meme is about 10%—the main returns come from the platform token BRRR incentives, with LP returns similar to those of Raydium.

According to KOL "Randle," the project has not yet been audited, and the underlying pools are Raydium's, so most assets should be on Raydium.

As a liquidity provision platform for meme coins, Farmer.Meme can achieve higher yields in the short term compared to other platforms through token incentives. However, the unlimited supply will inevitably lead to the phenomenon of "mining, withdrawing, and selling." Short-term profit acquisition is feasible, but due to the lack of an audit, attention must be paid to security, especially regarding wallet authorizations.

Conclusion: How to Achieve Stable Profits in the Meme Wave?

For users seeking stable investment opportunities in the meme market, both Raydium and Meme Farmer offer high LP yield potential:

Raydium is more suitable for investors who prioritize safety and stability, as its rich variety of liquidity pool types and market dominance provide reliable options for investors.

Meme Farmer is more suitable for short-term high-yield investors, obtaining higher returns through a token incentive model, but it is crucial to closely monitor the platform's security and the long-term stability of the token economy.

In addition to these two platforms, Orca and Lifinity also hold a certain market share, but the returns from meme coins in these platforms are relatively low. Regardless of which platform is chosen, investors should fully assess the high volatility characteristics of the meme market and find a balance between returns and risks.