Creating a Concentrated Liquidity Market Maker (CLMM) pool and farm on Raydium empowers projects and users to optimize capital efficiency, reduce swap slippage, and crowdsource liquidity in a decentralized way. Whether you're a developer launching a new token or a DeFi enthusiast exploring advanced market-making strategies, this comprehensive guide walks you through every step—from pool creation to reward distribution—with clarity and precision.
Before diving in, it’s strongly recommended to read the full guide to avoid irreversible actions and ensure optimal setup.
Understanding CLMM Pools and Farms
Concentrated liquidity allows providers to allocate funds within specific price ranges, increasing capital efficiency compared to traditional constant-product AMMs like Uniswap V2. On Raydium, CLMM pools offer tighter spreads and better pricing for traders while enabling higher returns for strategic liquidity providers.
By creating a farm, project teams can incentivize users to supply liquidity by offering token rewards—effectively decentralizing liquidity bootstrapping.
👉 Discover how top projects optimize liquidity with smart farming strategies.
Key Considerations Before Creating a CLMM Pool
Before initiating the process, keep these core principles in mind:
✅ Token Selection
Any SPL token listed on Solana can be used. Each pool consists of two tokens: a base token (first in the pair) and a quote token (second), which determines how much quote is needed to buy one base token.
Common quote tokens include SOL, USDC, or other stablecoins due to their wide adoption and price stability.
🚫 Avoiding Duplicate Pools
To prevent fragmentation, only one pool per fee tier is allowed for each token pair on Raydium. For example, there can only be one mSOL-USDC pool at the 0.25% fee level.
💰 Fee Tiers
Choose from four predefined fee levels based on expected volatility and trading volume:
- 0.01%: Ideal for highly stable pairs (e.g., stablecoin-stablecoin)
- 0.05%: Best for pegged assets or high-volume pairs
- 0.25%: Suitable for most standard trading pairs
- 1%: Designed for exotic or volatile token pairs
Liquidity providers earn 84% of trading fees; the remaining 16% supports RAY buybacks (12%) and treasury funding (4%).
🔢 Starting Price
This defines how many quote tokens are required to purchase one base token at pool creation. It anchors your initial price range.
📊 Initial Price Range
The range where your initial liquidity will be concentrated. Unlike traditional AMMs, where liquidity spans from zero to infinity, CLMM focuses capital around anticipated price movement—maximizing utilization.
Only the pool creator can initiate a farm for that pool. One reward token must be part of the base-quote pair; the second can be any SPL token.
📈 Rewards and APR Explained
Annual Percentage Rate (APR) reflects the annualized value of rewards relative to total liquidity in the pool. However, APR in concentrated liquidity models is more complex than in constant-product pools:
- Rewards and fees are distributed only among LPs whose positions include the current market price.
- Narrow ranges near the mid-price receive larger shares of both fees and emissions.
- APR fluctuates based on token prices, reward size, and active liquidity depth.
When estimating APR, consider:
- Expected liquidity concentration around the current price
- Volatility and projected price trajectory
- Reward token valuation over the mining period
Raydium’s UI offers three distinct APR calculation methods to help gauge potential returns for different positioning strategies.
⚠️ Once a farm is created, rewards are final and cannot be revoked. Adjustments or extensions must be made at least 72 hours before the current mining period ends.
Step-by-Step: Create a CLMM Pool
After connecting your wallet, navigate to the “Concentrated” tab on Raydium’s interface and click “Create Concentrated Pool” in the top-right corner.
1. Select Base and Quote Tokens
Choose the two tokens for your pool. The first selected becomes the base token, the second the quote token.
Example: Selecting SOL as base and USDC as quote creates a SOL-USDC pool, with prices quoted in USDC per SOL.
👉 Learn how top-performing pools structure their token pairs for maximum efficiency.
2. Choose a Fee Tier
Pick one of the four available fee levels based on your pair’s expected behavior:
- 0.01%: Stable pairs (e.g., USDC-USDT)
- 0.05%: Pegged assets or high-volume pairs (e.g., mSOL-SOL)
- 0.25%: General-purpose pairs (e.g., RAY-USDC)
- 1%: High-volatility or speculative tokens
This choice affects trader fees and LP yield distribution.
3. Set the Starting Price
Define how many quote tokens are needed to buy one base token at launch. You can view this from either token’s perspective.
🔒 After initialization, you cannot change the starting price, fee tier, or initial liquidity parameters.
However, you can later add more liquidity at different price points.
4. Define Your Initial Price Range
Set the lower and upper bounds for your starting position. The tool auto-fills a ±50% range around the starting price, but you can customize it.
Understanding position dynamics:
- If the market price falls below your lower bound: Your position converts entirely into the base token
- If it rises above your upper bound: Your position becomes fully composed of the quote token
This differs from traditional AMMs where liquidity remains balanced across all prices.
5. Deposit Amounts
Enter the quantity of both base and quote tokens you wish to deposit. The ratio is pre-filled based on your price range but can be manually adjusted.
Ensure sufficient balance in your wallet—remember, gas fees on Solana may be slightly higher due to transaction complexity.
6. Preview and Confirm
Review all settings carefully:
- Token pair
- Fee tier
- Starting price
- Price range
- Deposit amounts
Click “Confirm Deposit” and approve the transaction.
✅ Congratulations! Your CLMM pool is live. It typically appears on the Raydium UI within 5 minutes.
Note: Due to initialization complexity, expect slightly elevated gas costs during deployment.
Adding Mining Rewards: Create a Farm
Only the original pool creator (wallet) can create a farm for their CLMM pool.
1. Initiate Farm Creation
After pool creation, a prompt may appear asking if you’d like to “Create Farm.” Alternatively:
- Go to “My Pools”
- Find your created pool
- Click “Create Farm” from the dropdown menu
2. Configure Rewards and Duration
🪙 Reward Tokens
Select up to two reward tokens:
- First reward: Any SPL token
- Second reward (if used): Must be either the base or quote token of the pool—or one from an approved list including RAY, SOL, mSOL, stSOL, MNDE, LDO (Wormhole), UXP, HBB, RATIO, HDG
Example: For an mSOL-USDH pool, acceptable rewards include any SPL token plus either mSOL, USDH, or tokens from the approved list.
🕒 Mining Period Settings
- Minimum duration: 7 days
- Maximum duration: 90 days
- Choose exact start date/time—this cannot be changed after confirmation
Farms appear on the UI ~5 minutes post-creation. Until rewards begin, they display a “Coming Soon” status.
3. Review and Confirm
Double-check:
- Reward amounts
- Token selection
- Start time
- Duration
Click “Preview Farm”, then “Confirm Changes.”
Once confirmed, settings are immutable.
Your farm should now appear under the “Created” tab in the Concentrated section.
Managing Farms: Extend or Adjust Rewards
After launch, you can manage your farm via the “Show Created” toggle on the Concentrated page.
✅ Extending or Increasing Rewards
At any time during an active mining period:
- Add more tokens to increase emission rate or extend duration
- Minimum extension: 7 days
- Additional tokens must come from the original creator’s wallet
🔻 Decreasing Reward Rate
Only possible within 72 hours before the current period ends
- Must extend by at least 7 days
- Requires depositing additional tokens
🔄 Launching New Mining Periods
After a cycle ends, creators can launch a new one with updated parameters.
You may also add up to two additional reward tokens at any time, each with independent schedules.
Frequently Asked Questions (FAQ)
Q: Can anyone create a farm for my CLMM pool?
A: No. Only the original wallet that created the pool has permission to create or manage its associated farm.
Q: What happens if I set too narrow a price range?
A: If the market price moves outside your range, your position becomes inactive—earning no fees or rewards until it re-enters.
Q: Can I edit my farm after creation?
A: Core settings (rewards, start time, duration) are final once confirmed. However, you can extend or increase rewards before or near cycle end.
Q: Why is my pool not showing on Raydium after creation?
A: It usually takes about 5 minutes to appear. Delays may occur due to Solana network congestion.
Q: Do I need to maintain a minimum balance in my wallet after creation?
A: Not required for ongoing operation, but you’ll need funds if you plan to add more liquidity or extend farming rewards.
Q: Are there risks in concentrated liquidity provision?
A: Yes—impermanent loss is amplified when prices move significantly outside your range. Strategic range selection is crucial.
With this guide, you’re equipped to launch and manage high-efficiency CLMM pools and farms on Raydium—driving deeper liquidity and sustainable growth for your project.