Hey there, crypto enthusiasts! If you’ve been hearing about liquidity providing (LP) on Solana and want to jump in, you’re in the right place. The tweet thread by narkokek from July 22, 2025, breaks down everything you need to know about mastering liquidity providing on Meteora using Dynamic Liquidity Market Makers (DLMM). Let’s unpack this beginner-friendly guide step by step!

What’s DLMM and Why Should You Care?

DLMM, or Dynamic Liquidity Market Maker, is the powerhouse behind advanced LPing on Meteora. Inspired by platforms like Trader Joe’s Liquidity Book, it gives you, the liquidity provider, control over where your money goes, how you earn fees, and the risks you take. Unlike traditional Automated Market Makers (AMMs) that use a constant curve, DLMM organizes liquidity into “bins”—small price buckets where trades happen with zero slippage.

This means you can:

• Concentrate your funds in the most active price ranges.
• Earn more fees with less capital.
• Use cool strategies like Dollar-Cost Averaging (DCA) or custom liquidity shapes.

Key perks include concentrated liquidity, dynamic fees that rise with market volatility, and the option to provide liquidity with just one token. Perfect for newbies or those with a directional strategy!

Understanding Bins and Binsteps

So, what are these “bins” everyone’s talking about? Think of them as little buckets of liquidity at specific price points. Only one bin is active at a time, holding both tokens and earning fees. As trades happen, the active bin shifts based on price movement—right for price increases, left for decreases.

Then there’s the “binstep,” which is the percentage difference between bins. A smaller binstep gives tighter pricing (great for stable pairs), while a larger one covers a broader range (ideal for volatile assets). The trade-off? Smaller binsteps capture more volume but limit your price range, while larger ones spread your risk but reduce volume per bin.

Fees tie into this too. The base fee is calculated as Base Fee = Base Factor × Bin Step, so a larger binstep can mean higher fees. You’ll earn the most when your bin is active or crossed by trades.

How Trading Fees Work

Let’s talk money! As an LP, you earn fees from token swaps, split into a base fee (a steady minimum) and a variable fee (which spikes with volatility). The variable fee follows the formula Variable (per bin k) = A × (Volatility × s)², where volatility tracks how many bins the price crosses.

For example, imagine two scenarios with the same start and end price:

• Smooth Path: The price moves gradually, crossing few bins. Result? Lower variable fees.
• Pump and Dump Path: The price spikes and drops sharply, crossing many bins. Result? Higher fees due to increased volatility.

Even with the same outcome, the bumpy path earns you more. Plus, Meteora takes a small protocol cut—5% for standard pools and 20% for launch pools—leaving the rest for you.

Strategies to Get Started

Feeling ready to dive in? narkokek suggests checking out lparmy.com/strategies for weekly updates on LP strategies. For beginners, try the Anti-Sawtooth Strategy or In-Out Strategy. These are simple yet effective ways to start, and you can level up as you learn more from the community.

Tools to Level Up Your Game

To track and analyze your LP activity, narkokek recommends:

• RugCheck for token safety.
• BubbleMaps for wallet insights.
• Trench Bot for alerts.
• GMGN for trends.
• JUP for token filtering.
• Metlex by AlekssRG for trending pools and PnL visuals.
• The LP Army Discord for real-time collaboration (nearly 9,000 members strong!).

These tools will help you stay ahead and connect with a vibrant community.

Join the LP Army

Speaking of community, the LP Army Discord is where the magic happens. With almost 9,000 members, it’s a hub for asking questions, sharing tips, and growing together. Whether you’re a newbie or a pro, this is the place to find momentum and make friends in the DLMM world.

Wrapping Up

This thread by narkokek is a goldmine for anyone looking to master liquidity providing on Meteora. From understanding DLMM and bins to leveraging fees and strategies, you’ve got a solid foundation to start with. Grab your tools, join the LP Army, and start exploring the possibilities on Solana!

Ready to dive deeper? Check out the full thread on X and let us know your thoughts in the comments below. Happy LPing!