What Is Meteora DLMM?
A Dynamic Liquidity Market Maker on Solana using discrete price bins for concentrated liquidity.
Definition
Meteora's DLMM (Dynamic Liquidity Market Maker) organizes liquidity into discrete price bins rather than a continuous curve. Liquidity providers concentrate capital in specific price ranges, resulting in tighter spreads and better capital efficiency than standard AMMs.
How It Works
Each bin holds liquidity at a fixed price. When trades execute, they fill bins sequentially from the current price outward. This means trades near the current price experience minimal slippage, while price impact only increases significantly once nearby bins are exhausted.
In Continuum
Continuum L/S tokens are traded primarily through Meteora DLMM pools. The bin-based structure keeps spreads tight around oracle prices, which is essential for arbitrageurs to profitably close DEX-oracle gaps. Tighter spreads mean more frequent arb opportunities, which in turn generates more fees for CLP liquidity providers.
Related Terms
Profiting from price differences of the same asset across different markets.
Atomic transaction bundles on Solana that protect against MEV frontrunning.
A token that gains value when the underlying asset price increases.
A token that gains value when the underlying asset price decreases.
More DeFi Terms
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