What a liquidity pool is
A token only trades if there is something to trade it against. A liquidity pool is that something: a pot holding your token and SOL. Anyone can swap SOL for your token, or your token for SOL, directly against the pot. There is no order book and no one on the other side waiting.
Raydium's standard pool (called CPMM) uses a constant-product rule: the amount of your token multiplied by the amount of SOL stays constant through each trade. When someone buys, SOL goes in and tokens come out, so the price moves up. When someone sells, the reverse happens.
How your starting price is set
The first deposit fixes the starting price:
You choose the price by choosing the SOL side. More SOL means a higher starting price and a deeper pool. Less SOL means a lower starting price and a thinner one.
Why depth matters
Take that same pool of 1,000,000,000 tokens and 5 SOL. If someone buys with 1 SOL (ignoring trading fees), the pool ends up with 6 SOL and about 833,333,333 tokens. The buyer receives roughly 16.7% of the pool's tokens, and the price rises by roughly 44%.
That is a big swing from one small purchase. Deeper liquidity means the same buy moves the price less, which makes trading steadier for everyone. It also means more of your own SOL is at work, so choose an amount you are comfortable with.
How to create the pool on CopyFrenzy
- Open the token creator and fill in your token details.
- In the Liquidity Pool section, enter SOL to pair. Your full supply goes into the pool alongside that SOL.
- Launch. The token is created first, then the pool is created right after, in the same flow.
- Approve each wallet prompt. You will get a Solscan link and a DexScreener link, and a price chart appears in the success panel.
If the pool step fails for any reason (for example your wallet ran low on SOL), the token still exists. You can retry adding liquidity for the same mint from the launch panel or from your Portfolio page.
LP tokens: keep them or burn them
When you add liquidity, you receive LP tokens that represent your share of the pool. They are what let you take your liquidity back later (see how to remove liquidity).
- Keep them if you want the option to withdraw.
- Burn them if you want to prove the liquidity can never be pulled. Some creators do this to build trust. It is permanent.
Risks to keep in mind
- Price swings. Small pools move fast, in both directions.
- Impermanent loss. If the price moves a lot, your share of the pool can be worth less than simply holding the tokens and SOL.
- Fees and rent. Creating a pool costs a Raydium fee plus network rent. See the cost breakdown.
