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DAMM v2 (Concentrated Liquidity)

DAMM v2 is a concentrated liquidity automated market maker (AMM) protocol on Solana, designed for efficient trading and optimal use of capital. It allows liquidity providers to allocate their funds to specific price ranges, which increases capital efficiency and reduces slippage for traders.

Key Features​

  • The backend automatically manages all pool creation, liquidity allocation, and parameter selection.
  • Traders benefit from deeper liquidity within active price ranges, resulting in better prices and lower slippage.
  • Pools support multiple assets and are configured with optimal fee tiers and parameters for each use case.
  • DAMM v2 is suitable for established tokens with active trading and for advanced DeFi strategies that require precise liquidity management.

How DAMM v2 Works​

All DAMM v2 pools are created and managed automatically by the backend. For each pool:

  1. The backend selects the token pair and determines the optimal price ranges for liquidity allocation.
  2. Liquidity is deposited and managed within these ranges to maximize capital efficiency and trading performance.
  3. Traders swap tokens within the pool, benefiting from concentrated liquidity and efficient execution.
  4. The backend monitors and adjusts liquidity as needed to respond to market conditions and optimize returns.

When to Use DAMM v2​

  • For tokens with significant trading volume and established markets.
  • When capital efficiency and low slippage are important.
  • For liquidity providers seeking to maximize returns by focusing on specific price bands.
  • For advanced DeFi strategies that require dynamic liquidity management.

Learn More​