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How to Provide Liquidity
Earn trading fees & LP rewards by providing liquidity and creating markets for your favorite NFT collections on TensorSwap.
"Providing liquidity" on TensorSwap means creating "maker" orders, which include:
Early liquidity providers on TensorSwap are eligible for accelerated rewards. ⭐️
Collection-wide bids let you put in an offer for the entire collection. For example, you might offer to buy "any SMB" for 100 SOL. Anyone with a SMB can then take that offer.
When placing more than one bid at a time you can make use of TensorSwap's bonding curve functionality. This is just a fancy way of saying you can automate your bid prices to adjust downwards with every subsequent purchase.
If you choose an "exponential" bonding curve (%) with a starting price of 1 SOL and an increment of 10%, each consecutive purchase will be 10% lower. So for 5 NFTs, it would be: 1 SOL > 0.9 > 0.81 > 0.74 > 0.67.
To set up a collection-wide bid:
- 1.
- 2.Choose your desired collection
- 3.On the right hand side choose BUY > then COLLECTION-WIDE BID
- 4.Choose the number of NFTs you are willing to buy, starting price, and the decrement, then place the order
List orders let you list a bunch of NFTs at the same time, exactly like listings you'd put up on OpenSea or MagicEden, with one big difference - you can configure a bonding curve.
Bonding curve simply means that with each sale, your selling price adjusts upwards. This lets you sell at higher prices as your portfolio gets depleted.
If you choose a "linear" bonding curve (◎) with a starting price of 1 SOL and increment of 0.1 SOL, each consecutive sale will be 0.1 higher. So for 5 NFTs, it would be: 1 SOL > 1.1 > 1.2 > 1.3 > 1.4.
To set up a list order:
- 1.
- 2.Choose your desired collection
- 3.On the right hand side choose SELL > then LIST
- 4.Choose the number of NFTs you re willing to sell, starting price, and increment, then place the order
You'll need to be in "Pro" mode (bottom toggle) to market-make.
In short, it's a two-sided order in which you're offering to both buy and sell a certain number of NFTs.
Read the above two sections first to understand how collection-wide bids and list orders work.
An MM order is just a collection-wide bid + a list order placed together, with a few key differences:
- 1.When placing a MM order, your starting BUY price will be 1 notch lower than your starting SELL price. So, for example, if you're setting up a MM order on a linear curve with 0.1 SOL delta and 1 SOL starting price, your first BUY price will be 0.9 (0.1 lower than 1 SOL).
- 2.Placing an MM order lets you set up custom fees (up to 25%). These are charged on top of Tensor's 1% taker fees and are completely up to you. We recommend setting up something reasonable, so you attract buyers.
- 3.When a MM order SELLs to the taker (buyer), royalties are voided. This is done to incentivize market-making orders which create volume and liquidity for the collection. When a MM order BUYs from the taker (seller), royalties are upheld and paid by the taker.
To set up a market-making order:
- 1.
- 2.Choose your desired collection
- 3.On the right-hand side choose MARKET-MAKE
- 4.Choose the number of NFTs you re willing to buy & sell, starting price, and delta, then place the order
For a rundown of config params & for 3 simple templates (low risk 🟩, medium risk 🟨, high risk 🟥) check out Setting up your Market-Making Order