In the fast-paced world of meme coins, where projects launch and sometimes vanish overnight, smart liquidity provision can make all the difference. A recent thread on X from crypto analyst @tendorian9 highlights a key strategy for those diving into Dynamic Liquidity Market Makers (DLMM) on new coins—especially those less than 12 hours old. The golden rule? Always opt for 5% or 10% fee pools. Let's break this down and see why it could supercharge your earnings while minimizing risks.

Understanding DLMM and Fee Pools

First off, if you're new to this, DLMM stands for Dynamic Liquidity Market Maker, a system popularized by platforms like Meteora on the Solana blockchain. It allows users to provide liquidity to trading pairs in a more flexible way than traditional AMMs (Automated Market Makers). You deposit assets into pools, earn fees from trades, and potentially rack up rewards like MET points from Meteora's ecosystem.

Fee pools refer to the percentage of each trade that goes to liquidity providers as a reward. Lower fees like 0.1% or 0.2% might seem appealing for attracting volume, but for brand-new meme coins, higher fees—5% or 10%—are where the real opportunity lies.

Why Go for Higher Fees on Fresh Coins?

As @tendorian9 points out, with super young coins, you don't have to compete with massive liquidity providers yet. This is your chance to be "greedy" in a good way. Higher fees mean you capture more from each transaction, directly boosting your returns. Plus, those extra fees translate into more MET points, which are like loyalty rewards that can unlock further perks in the Meteora army (@met_lparmy).

But it's not just about greed—it's smart risk management. Meme coins are notorious for "rugs," where developers pull the liquidity and run, leaving holders high and dry. Higher fee pools help offset impermanent loss (IL), which is the potential value drop when the price of your deposited assets diverges. In a rug scenario, those beefier fees you've collected act as a buffer, making the whole endeavor less painful.

Red Flags in Low-Fee Pools

The thread warns against jumping into 0.1% or 0.2% pools for new coins. These could be set up by folks using DAMM (possibly Dynamic Automated Market Maker, another liquidity strategy) to offload their holdings quietly. Worse, it might be the project creators themselves minimizing their costs before a rug. Remember, 99.99% of meme coins fail or rug eventually, so the mindset should be to extract maximum value from traders, snipers, and paper-handers while you can.

Community replies echo this sentiment. Users like @LordCendra hype up the "evil Saiyan panda mode" to devour low-fee opportunities, while others share how they default to 5-10% pools for safety, even if volume is low overnight.

Practical Tips for Meme Coin Liquidity Providers

If you're providing liquidity on Meteora or similar platforms, start by scouting new launches via tools like Dexscreener or Solana explorers. When setting up or joining a DLMM pool:

• Prioritize 5% or 10% tiers for coins under 12 hours old.
• Monitor for suspicious low-fee pools that might signal ulterior motives.
• Always DYOR (Do Your Own Research) on the project's community and tokenomics.
• Keep an eye on engagement metrics—low views or likes might indicate a lack of real interest.

This approach aligns with the volatile nature of meme tokens, turning potential rugs into fee-harvesting opportunities. As the crypto space evolves, strategies like this help blockchain enthusiasts stay ahead.

For more insights on meme coin trends and liquidity tactics, check out our knowledge base at Meme Insider. What's your go-to strategy for new launches? Share in the comments!