How to Use Raydium on Solana

What Is Raydium?

Raydium is one of the leading decentralised exchanges on the Solana blockchain. It combines an AMM (Automated Market Maker) liquidity pool model with access to Solana’s Central Limit Order Book (CLOB) for some pairs, providing both passive liquidity provision and order book-based execution. Raydium is the primary DEX infrastructure for much of Solana’s DeFi ecosystem and is integrated with or a liquidity source for many other Solana protocols.

Solana’s architecture gives Raydium characteristics distinct from Uniswap on Ethereum or PancakeSwap on BNB Chain. Transactions on Solana are confirmed in under a second and cost a fraction of a cent. This speed and cost profile makes trading small amounts economical and allows for more rapid trading strategies that would be prohibitively expensive on Ethereum mainnet.

Using Raydium is a core skill for anyone participating in the Solana DeFi ecosystem: trading new SPL tokens, providing liquidity for yield, or accessing Solana-native projects. This guide covers the complete workflow from wallet connection to executing swaps and providing liquidity.

 

Setting Up for Raydium

To use Raydium you need a Solana-compatible wallet with SOL for transaction fees and the tokens you want to swap. Phantom Wallet is the most widely used Solana wallet and is the recommended starting point for most users. Backpack and Solflare are valid alternatives.

Acquire SOL through a centralised exchange and withdraw to your Phantom wallet address on the Solana network. Even a small amount of SOL (0.1 SOL) is sufficient for many transactions given Solana’s low fees. Unlike Ethereum where gas fees can consume a significant portion of a small transaction, Solana gas fees are typically under $0.001 USD per transaction.

Understanding Solana’s token account structure is useful: receiving any new SPL token for the first time on Solana requires creating a token account, which costs a small amount of SOL (approximately 0.002 SOL per token type). This is a one-time cost per token and is one reason your SOL balance occasionally shows small unexplained deductions, as described in the Solscan guide.

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Swapping Tokens on Raydium

 

Connect Your Wallet

Navigate to raydium.io. Click “Connect Wallet” and select Phantom (or your preferred Solana wallet). Approve the connection in your wallet. The interface shows your current token balances.

 

Select Your Swap Pair

In the Swap section, select the token you want to sell and the token you want to receive. For established tokens, you can search by name. For newer or obscure tokens, paste the contract address (the mint address in Solana terminology) from the project’s official source. As with all DEX token searches, verify the mint address independently to avoid swapping for a fake token with a similar name.

 

Review Slippage and Execute

Review the slippage tolerance setting before executing. The default 0.5% is appropriate for liquid pairs. For new or thin tokens, a higher tolerance may be needed. Review the price impact: if your trade represents a significant portion of the pool’s liquidity, price impact will be high and you may want to use a smaller amount or check alternative venues.

Click “Swap” and confirm the transaction in Phantom. Solana transactions confirm in under a second in most conditions. You can verify the completed transaction on Solscan.

 

Jupiter Aggregator vs Raydium Direct

For most Solana swaps, using Jupiter (jup.ag) rather than Raydium directly is recommended. Jupiter is a DEX aggregator that routes your trade across multiple Solana liquidity sources (including Raydium, Orca, Meteora, and others) to find the best execution price. If Raydium has the best price for your specific pair, Jupiter will route through Raydium. If splitting the route across multiple pools produces a better price, Jupiter handles that automatically.

For simple, established token pairs, the price difference between Jupiter and direct Raydium may be negligible. For obscure tokens with thin liquidity, Jupiter’s multi-venue routing can provide meaningfully better execution. As a general practice, check Jupiter first for any Solana swap.

Raydium is particularly valuable to access directly for: providing liquidity to specific pools, accessing pools that may not yet be indexed by aggregators, or for its specific farm and yield products that are accessed through the Raydium interface specifically.

 

Providing Liquidity on Raydium

Raydium offers two types of liquidity provision.

 

Standard Liquidity Pools (CPMM)

Standard liquidity pools on Raydium are similar to Uniswap V2: you deposit equal value of two tokens, receive LP tokens representing your share, and earn a portion of the trading fees from the pool. The main risk is impermanent loss: if the price ratio of the two tokens changes significantly, your combined position may be worth less than if you had simply held the tokens. Fee income from active pools can offset this depending on trading volume.

 

Concentrated Liquidity (CLMM)

Raydium’s Concentrated Liquidity Market Maker pools allow you to provide liquidity within a specific price range rather than across the full price range. If the price stays within your range, your liquidity earns significantly higher fees than a standard pool position because your capital is concentrated where trades are actually occurring. If price moves outside your range, your liquidity becomes inactive and earns no fees until price returns to your range. This is a more active strategy that requires monitoring and range adjustment.

Before providing liquidity, understand the risks. Impermanent loss, smart contract risk, and liquidity management complexity all apply. The DeFi risks guide covers these in detail. For most retail investors, liquidity provision is a more complex activity than simple token swapping and warrants research before committing significant capital.

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