Recently, many people have asked me how to set up their own CLMM liquidity pools on Raydium, so I’ve organized my experience to share with everyone.

The process isn’t as complicated as it seems, but there are a few details you must understand clearly. First, you need to realize that the biggest difference between CLMM pools and traditional AMMs is the concentration of liquidity. Instead of spreading your funds across the entire price curve, you select a specific price range and put all your money into it. This allows market makers to earn more trading fees and rewards.

Before creating a pool, decide which two tokens you want to use. The pairing of the base token and quote token is very important; usually, the quote token will be a stable asset like SOL or USDC. Raydium’s rule is that each fee tier can only have one pair of tokens, so don’t try to create duplicates.

There are four fee tiers to choose from. For stablecoin pairs, select 0.01%. For high-volume pegged assets, choose 0.05%. Most trading pairs go with 0.25%. For less common, exotic pairs, use 1%. Once the fee tier is set, it cannot be changed, so think carefully.

Next, set the initial price, which determines how much quote token you get for one base token. Then, the most critical step—choose your initial liquidity range. The system will automatically suggest a range ±50% around the starting price, but you can adjust it manually. Remember, once the pool is initialized, the starting price and range cannot be changed.

The deposit amount is automatically calculated based on your selected price range, with the ratio of base to quote tokens filled in automatically, but you can adjust it manually. After confirming everything is correct, click confirm to submit the transaction on-chain. Note that the gas fee will be higher than usual because of the initialization. After the pool is created, it will appear on the UI in about 5 minutes.

Once the pool is set up, if you want to reward liquidity providers, you need to create a farm. Only the pool creator can do this. A farm can have up to two reward tokens, and at least one must be either the pool’s base or quote token. For example, if you created an mSOL-USDH pool, one reward can be any SPL token, but the other must be either mSOL or USDH.

Set the reward duration between 7 and 90 days, then specify the start time. Be aware that once the start time is set, it cannot be changed, so plan carefully. After creating the farm, it will also appear on the UI in about 5 minutes, marked as “Upcoming” before the rewards start.

Calculating APR is more complex because, in CLMM, liquidity providers compete for both trading fees and token emissions. Liquidity near the middle price will earn more fees and a larger share of rewards, so when setting rewards, you need to consider liquidity concentration, token price volatility, and other factors.

The rewards allocated to the farm are final and cannot be reclaimed once set. However, you can adjust the reward rate within 72 hours before the mining period ends or add extra rewards at any time to extend the mining period. If you want to lower the reward rate, you can only do so close to the current period’s end.

That’s basically the whole process. The barrier to entry for CLMM is a bit higher than traditional liquidity mining because you need to manage the price range yourself, but if done properly, market-making efficiency can be much higher. If you’re interested, try it out on Raydium and experience the concentrated liquidity approach.