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📚 LIQUID TOKEN - Documentation
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How the LIQUID TOKEN Protocol Works

Overview

LIQUID TOKEN is an automated liquidity protocol that continuously adds liquidity to the Meteora DAMM v2 pool, creating a sustainable and growing liquidity base for the token. The protocol automatically claims fees, performs buybacks, and adds the tokens to the liquidity pool.

How It Works

1. Fee Claiming

The protocol automatically claims accumulated fees from Pump.fun bonding curve and PumpSwap AMM pools. These fees are generated from trading activity on the token.

2. Automatic Buyback

After claiming fees, the protocol automatically buys back tokens from the market. The buyback mechanism:

  • First attempts to buy from the Pump.fun bonding curve (if the token hasn't graduated)
  • Falls back to PumpSwap AMM if the token has graduated from the bonding curve
  • Uses accumulated fees plus a portion of newly claimed fees

3. Liquidity Addition

Once tokens are purchased, the protocol automatically adds them to the Meteora DAMM v2 liquidity pool:

  • Claimed fees are used to add liquidity to the pool
  • Liquidity is added as a 50/50 split between SOL and tokens for the LP pair
  • LP position NFTs are created and can be permanently locked

4. Position Locking

When liquidity is added, the protocol can permanently lock the position NFT, ensuring the liquidity cannot be removed. This creates a deflationary effect and builds trust in the protocol.

Benefits

  • Continuous Liquidity Growth: The pool grows automatically with every fee claim cycle, providing increasing liquidity over time.
  • Price Stability: Growing liquidity reduces price volatility and slippage for traders.
  • Reduced Slippage: More liquidity means better prices for larger trades.
  • Community Trust: Locked liquidity demonstrates commitment and reduces rug pull risk.
  • Automated Process: No manual intervention required - the protocol runs continuously.
  • Transparency: All LP additions are tracked and displayed in real-time on the dashboard.

Technical Details

Pool Integration

The protocol integrates with Meteora's DAMM v2 (Dynamic AMM) pools, which use concentrated liquidity with a ±50% price range. This allows for efficient capital utilization.

Real-Time Tracking

All operations are tracked in real-time:

  • Total SOL in the liquidity pool
  • Total Value Locked (TVL) in USD
  • Number of LP additions
  • Recent transaction history

Automation Cycle

The protocol runs on a continuous cycle:

  1. Check for claimable fees (every 30 seconds by default)
  2. If fees are available, claim them
  3. Calculate buyback amount (accumulated + new fees)
  4. Buy tokens from the market
  5. Add liquidity to Meteora pool
  6. Lock the position NFT (optional)
  7. Update statistics and broadcast updates

Security & Trust

The protocol is designed with security and trust in mind:

  • All transactions are on-chain and verifiable
  • LP positions can be permanently locked
  • No admin controls to withdraw liquidity
  • Transparent tracking of all LP additions
  • Real-time dashboard for monitoring

Getting Started

To interact with LIQUID TOKEN:

  1. Visit the main dashboard to view current stats
  2. Check the pool address on Meteora
  3. Monitor the event log for real-time LP additions
  4. View pool analytics for detailed information

💧 LIQUID TOKEN - Building sustainable liquidity, one cycle at a time.