Another profit strategy in the MEME market: earning extra returns by being a Liquidity Provider (LP)

In the meme market, there is a high demand for trading volatility and a low sensitivity to price. Positioning oneself as a passive LP is an excellent strategy to maximize returns. This article is derived from Cap’n Jack Bearow's research on the X platform, compiled, translated, and written by PANews. (Background: CZ and V God advocate! Biomedical meme coin surges by k times, hot money flows into the DeSci Decentralization scientific track). 8 months ago, I wrote a post about LP costs, which didn't attract much attention at the time. However, the reading volume of the article tripled yesterday, so this article revalidates this method with the latest examples. Premise: To make this method work better, you need to position yourself in memecoin early and recognize that a certain memecoin has certain advantages in the medium to long term and has a large volume. This article uses BUCK Token as an example. As mentioned in the previous article, you need to set a v3 range, with the lower limit slightly lower than the current price of the Token (usually about 25% lower) and the upper limit relatively higher (this article chooses about 100 BUCK/SOL or about $2.5/BUCK). This setting minimizes the amount of SOL you have to deposit into LP and gradually allows you to transfer from memecoin to SOL through DCA (dollar-cost averaging) as the price rises. Let's talk about Impermanent Loss (IL) here. Here is a quote from @AbishekFi: IL is a tool, not a loss... Measuring LP returns is a hot topic, but it actually depends on your preference as an LP. Do you want asset A or asset B? Or are you willing to let the value of your position be higher? The only way this happens is if one or two assets in your Token appreciate, resulting in Impermanent Loss. However, if you LP two assets that you don't mind holding, then you are just building an on-chain DCA that incurs costs at the same time.