I started doing LP on Robinhood Chain with 10000 USDG last month and earned 20000 USD in a month. Since then, I have gradually increased my position and am currently collecting rent steadily every day. I will share the complete tutorial and thoughts on it, as well as the pitfalls I have encountered. (Not shouting orders, not advertisements, the most authentic workflow for individuals) one ️⃣ First of all, let's be clear: LP is not about throwing money in and lying around to make money Many people's eyes lit up when they saw the "annualized 5000%+APR" and they just stared at it. I paid a lot of tuition fees in the first week, and the money earned by LP is not enough to make unpredictable losses! The money earned by LP=commission income - impermanent loss - gas fee - cost of selecting the wrong range If a meme coin drops 90% directly, no APR can save you. Only by understanding this can we continue reading! two ️⃣ Basic concept: You must first understand these three things ① What is an LP liquidity provider? Simply put, you deposit two types of tokens (such as USDG+a certain meme coin) into a pool to help others increase their trading depth. Every time someone buys or sells in this pool, you pay a handling fee. You are not buying coins, you are acting as a market maker. ② What's different about pools? 1%+Pool: High transaction fees, suitable for new currencies with large fluctuations, but also more diversified liquidity 0.3% pool: moderate, common mainstream pairing 0.05% Pool: Ultra low fees, suitable for stablecoin pairs The main battlefield for meme coins on Robinhood Chain is basically in the 1% pool, where the transaction fees are the highest but the risks are also the highest. ③ What is the Bid Ask/Spot/Curve strategy? These three are the "shapes" of liquidity: Spot: Concentrate liquidity around the current price, like a peak Bid Ask: Distribute liquidity on both sides of the current price like a U-shape, suitable for sideways fluctuations Curve: Smooth curve distribution, more conservative, suitable for market trends with a certain degree of certainty In the early stages of the outbreak of the new meme coin, I mainly deployed it using Spot+multi segment range stacking. three ️⃣ My discovery process: Being 10 minutes earlier than others is enough I use GMGN to monitor the newly released Robinhood tokens. The indicator I am focusing on is not the trading volume itself, but the ratio of trading volume to active liquidity A pool with only $50k liquidity but a trading volume of $200k within 5 minutes is the window of opportunity. And @ gmgnai has this heat monitoring logic, such as Figure 1. Once I discover such a pool, I immediately turn to do the following Four things: ·Go to @ fomo to check the on chain data: distribution of holders, whether major players are accumulating, and whether there are any sniper wallets being smashed. ·Search for narrative on X: Are there any real KOLs naturally discussing, or are they purely robot driven. Is there a website, what is its main business, is it integrated with RWA narrative, what KOLs are it following, and so on. ·Search for its LP data on @ BarkerMoneyX, including 30 minute transaction fees, fund efficiency, etc. You can also configure it with just one click. It has "crash protection" and "automatic re hanging" functions, which are also very useful (such as Figure 2). ·Go to @ lpagent_io to take a look at the smart LPs and their strategies. Build your own strategies, provide assistance, and you can also easily follow up with group LPs. Lazy benefits such as Figure 3). If the holders are highly concentrated in 3-5 wallets, or if there is no real account on X saying this coin, I will skip it directly, no matter how high the APR is. four ️⃣ Execution: How do I open a warehouse The execution tool I use is Uniswap, which provides liquidity pools directly on the official page. Why not directly use third-party tools to group LPs? Firstly, for security considerations, and secondly, my LP strategy mostly uses Claude to create pairing plans for me, which is relatively more flexible. Here, I have divided the LP strategy into three parts, corresponding to the different states of the meme coin lifecycle: the pull-up stage, the sideways stage, and the crash stage. I adopt completely different configuration ideas and solution strategies at each stage. First, remember the underlying logic When doing LP, you need to always ask yourself two things: ① Where is the price likely to go next? ② Is my liquidity on the path of price? Because only when the price fluctuates within the range you set, can you earn transaction fees. If the price runs out of your range, you become a one-sided position, either all of the meme coins (price drops below), or all of U or ETH (price rises below). Understand this, you can instantly grasp the following three strategies. Status 1: Boosting period (new currency has just exploded, prices are rapidly rising) Features: 5-minute surge in trading volume, price ladder like upward trend, emerging narrative on X, sniper wallet making profits. This is the stage with the highest transaction fees and also the most vulnerable to losses. My strategy: Bid Ask+Upside Layout Why? Because the price is going up, I want to put more liquidity above the current price, so that when the price rises, it constantly crosses my position and generates transaction fees. Specific layout (assuming current price of $0.01): The price range is from $0.010 to $0.013, with a 40% position and a main dining fee range. The price range is from $0.013 to $0.020, with a 35% position and a chasing range. If the price continues to rise, you can still enjoy it. The price range is from $0.005 to $0.010, with a 25% position and a buffer below. In case of a sharp drop, there may be a takeover. Personal suggestion: During the pull-up period, it is necessary to use a narrow range and multiple segments. The narrower the range, the higher the density of the same money in the unit price range, and the more aggressively the handling fees are charged. But this also means that once the price reverses and falls below, you will instantly have a pile of meme coins in your hands. So during the pull-up period, what I value most is not how much profit I make, but keeping an eye on the retreat signal (see last tip) ）。 ⚖️ State 2: Horizontal period (prices fluctuate back and forth within a range) Characteristics: The price fluctuates up and down but does not break the level, the trading volume remains moderate, the sniper market has left, and the rest are real traders buying and selling each other. Generally, this type of meme coin has been issued for more than 24 hours and has gone through the most severe stage of PVP, relatively stable. This is actually the most comfortable and cost-effective stage. The risk is smaller than the rise period, but the transaction fees continue to be charged. My strategy: Spot concentration+narrow range A sideways trend means that the price is likely to fluctuate within a certain range, so I will highly concentrate the liquidity in this box range, maximizing the charge for each back and forth oscillation. Specific layout (assuming to oscillate between $0.009 and $0.012): The price range is from $0.0095 to $0.0115, with a 70% position concentrated in the volatile core area and full density. Price range from $0.009 to $0.0095, 15% position, bottom edge defense. Price range $0.0115- $0.012, 15% position, upper edge defense. Why use Spot to concentrate during sideways periods? Because you already know that prices are unlikely to go far, there is no need to spread liquidity too widely. Concentration=high density=charging more for the same oscillation. During the sideways period, I often hold onto a position for several days and rely on repeated fluctuations to stabilize fees, which is truly close to the state of "passive income". State 3: Collapse period (narrative ends, price drops unilaterally) Features: 5-minute trading volume sharply shrinks, holders begin to collectively retreat, no one raises X anymore, and prices fall in a tiered manner. This is where beginners lose all their capital. Many people are still staring at the artificially high APR on the dashboard and unwilling to leave. My strategy: don't do LP, withdraw. Doing LP during the crash period is purely suicidal because: The trading volume is gone → The transaction fee is almost zero Price drops unilaterally → Your liquidity will all be converted into the meme coin that is currently zeroing out The only correct action at this point is to retrieve the position. If you still want to take a gamble in a crash (which I generally don't recommend beginners to do), there is only one extreme gameplay: Bid Ask+all spread below+extremely wide range, bet on a dead cat jumping oversold rebound. But this is speculation, not an LP strategy, and the risk is extremely high. My principle: Once the narrative is over, withdraw the capital immediately to save your life. Keep the green mountains here, there will be more to play for the next meme coin. A universal retreat signal for three states At any stage, I immediately become alert upon seeing these signals: ·5-minute continuous decline in trading volume (most importantly) ·Large wallets begin to experience net outflows ·Discussion on the Hot Cliff on X ·The price has fallen below my lowest liquidity range As long as I win two, I will start reducing my position; Three of them, just clear the warehouse and leave. Remember, doing LP earns "friction fees when money flows". If the money stops flowing, staying in the pool will only leave you with risks and no returns. Managing positions: APR is fake, capital flow is real The APR displayed on the dashboard of each LP tool is a historical snapshot and does not represent the future. The only indicator I really focus on is whether the 5-minute trading volume is still there or not. When the 5-minute trading volume of a pool begins to shrink, the transaction fee quickly disappears. At this point, I have several options: Migration to a new rate layer: Sometimes funds may be moved from the 1% pool to the 0.3% pool, and it is important to plan ahead before the migration occurs Direct withdrawal: If the narrative has already ended and there are no new catalysts, leave with the handling fee I don't look at how high APR is, I look at whether money is still flowing in this direction. Additional advantage: Study the positions of other excellent LPs Many people may not have thought of this, but it is one of my important sources of profit. I use @ lpagent_io to track the wallets of excellent LP traders. As Figure 4. For example, when I found some excellent wallets early on, I didn't directly copy their positions, but studied their logic: ·At what time did he enter? ·How was his scope set? ·When will he withdraw? If you copy someone else's position, the best outcome would be to be the same as him. But if you understand his thinking framework, you can do better than him because you can move forward and retreat more accurately. Financial Management: Why Have I Survived Until Now More than 70% of this part determines whether you can make money, but most people completely ignore it. My rules: ① A single pool shall not exceed 20% of the total funds in a single transaction No matter how good the opportunity is, it's not worth betting on it all. Meme coin can increase fivefold in 10 minutes and return to zero in 10 minutes. ② Partial capital withdrawal with transaction fee income Once the handling fee recovers 30% -50% of the initial position, I will withdraw a portion of the principal. Continuing to play with 'earned money' has a completely different mindset. ③ See clearly what you're betting on What you're betting on when doing LP is that this coin won't fall too much during your holding period and has enough trading volume. It's not a bet that it will rise, it's a bet that it has frictional costs that can be harvested. Summary: What is my true advantage. I don't have any magical Alpha, no insider information. My strengths are in three words: fast, accurate, and fast. Quick: Discover meaningful trading volume earlier than others Accurate: Use multiple ranges to keep funds working within the right price range Run: Leave before the flow of funds disappears, not greedy for the last bite Today I took a brief look and found that in the past month, a total of 1281 transactions were completed, with a win rate of 82.2%, all of which were accumulated through continuous practice. There is no myth in the market, only hard work and diligent research.