Magic Eden, the leading cross-chain NFT marketplace, has enhanced its Solana pool creation experience with a redesigned interface and flexible market-making tools. Whether you're buying, selling, or doing both, Magic Eden’s AMM Pools give you more control and clarity in your trading strategy.
1. What Are AMM Pools on Magic Eden?
Automated Market Maker (AMM) pools on Magic Eden are flexible tools that allow you to automate NFT trading by setting up structured buy and/or sell orders. Rather than submitting single collection offers or listings one at a time, AMM pools let you define a strategy using customizable parameters.
You can configure your pool in one of three ways:
Buy-side only (collection offers with pricing curves)
Sell-side only (tiered listings with dynamic pricing)
Double-sided (market making on both sides)
While the new interface is optimized for double-sided pools, it still fully supports single-sided configurations by setting either buy or sell quantity to zero.
2. Why Provide Liquidity on Magic Eden?
Joining Magic Eden's AMM ecosystem lets you participate as a market-maker in the NFT space — and earn fees for doing so.
Automated Trading Without Emotion
Magic Eden’s AMM tools help automate buy-low, sell-high behavior through pricing curves, removing the stress and second-guessing of manual trading.
Buy-side LPs lower the price with each successful purchase.
Sell-side LPs raise the price with each successful sale.
Double-sided LPs combine both strategies, enabling profit capture in both directions — while charging fees.
Earning Fees as a Market Maker
You can set an LP Fee between 0–10%, earning a cut of every transaction that passes through your pool.
Set competitive fees to attract volume.
Use tighter spreads and lower fees to stay close to floor pricing.
Collections with optional royalties are particularly attractive since you can profit from your LP fee without being offset by enforced royalties.
Note: If a collection enforces royalties, that will impact your margin and may make certain AMM strategies less profitable.
3. Core Terms & Mechanics
Before setting up a pool, get familiar with key terms:
Buy Quantity: Number of NFTs you're offering to buy.
Start Buy Price: Entry price for your first buy offer.
Sell Quantity: Number of NFTs you're selling.
Start Sell Price: Price for your first NFT listing.
LP Fee: % fee you earn on each trade in the pool.
Change By: How much the price moves after each buy/sell (in % or SOL).
Pricing Curve Type: Either linear (additive) or exponential (percentage-based price changes).
4. Buy-Side Liquidity Pools
Buy-side LPs allow you to place multiple buy offers at varying prices based on a pricing curve. You only need to set:
Curve Type: Linear or exponential
Highest Buy Price
Number of Offers
Incremental Delta (price step between each offer)
Example:
A buy-side LP with 5 offers, a highest buy price of 0.0015 SOL, and a 10% exponential delta will create a descending price curve. Each new buy offer will be 10% lower than the previous one.
5. Sell-Side Liquidity Pools
Sell-side LPs let you list NFTs at staggered prices. You’ll need to define:
Curve Type: Linear or exponential
Lowest Sell Price
Number of NFTs
Incremental Delta
Example:
A sell-side LP of 3 NFTs starting at 0.001 SOL with a 10% increase will list the next two NFTs at 1.1x and 1.21x the price, respectively.
6. Double-Sided Liquidity Pools (Flexible by Default)
While Magic Eden’s redesigned interface encourages setting up both buy and sell orders in one pool, the system remains flexible:
You can still create single-sided pools by setting either the Buy Quantity or Sell Quantity to zero.
This allows you to operate only as a buyer (collection offer strategy) or only as a seller (tiered listing strategy), depending on your market view.
Key Capabilities:
Buy NFTs at descending prices
Sell NFTs at increasing prices
Collect LP fees from both transactions
Visualize price dynamics in real time
Parameters You Control:
Number of NFTs to buy and/or sell
Start price for each side
LP fee per transaction
Change By amount (for price movement between orders)
7. Updated Interface: What’s New
Magic Eden’s pool creation interface has been streamlined with the following updates:
Flexible Pool Configuration: Set just buy, just sell, or both sides in one flow.
New "Price" graph view: Visualize your buy/sell curves as you adjust parameters.
Color-coded price curves:
Green circles/line = Buy-side offers
Red circles/line = Sell-side listings
"Orderbook" tab: View how your orders compare to other participants.
8. How to Create a Pool (Step-by-Step)
You can access pool creation on both desktop and mobile.
Step 1: Navigate to the Collection Page
Click into the NFT collection you want to trade.
Select the "Pools" tab, then click "Create Pool".
Step 2: Set Buy and/or Sell Sides
Use the Buy Quantity slider or input to set your desired buy volume.
Define your Start Buy Price.
Add traits if targeting specific NFTs.
Use the Sell Quantity field to choose how many NFTs you want to list.
Define your Start Sell Price, which can be benchmarked to the floor price.
You can create a sell-only pool by setting Buy Quantity to 0 or a buy-only pool by setting Sell Quantity to 0.
Step 3: Configure Advanced Settings
Adjust the LP Fee (e.g., 5%) to determine how much you earn per trade.
Set the Change By increment for dynamic pricing.
Use the price graph to preview how your orders are structured.
Step 4: Finalize and Create Pool
Review all parameters.
Click "Create Pool".
Approve two wallet transactions:
Deposit SOL for buying NFTs
Deposit NFTs for selling (if applicable)
A confirmation modal will let you know your pool is live.
8. Visual Feedback and Market Intelligence
The Price tab provides a dynamic visual preview of your pool's setup:
Green = Buy offers
Red = Sell listings
Y-axis = Price in SOL
X-axis = Order sequence (+/- steps from the base price)
The gap between green and red lines reflects your LP fee and pricing spread.
This helps you fine-tune your position before you commit funds or assets.
9. Using the Orderbook for Strategy
The Orderbook view shows where your pool's buy and sell orders stand in relation to others:
Are your buy offers close to the floor?
Is your sell curve undercutting other listings?
Should you reduce your LP fee to tighten the spread?
This market visibility allows smarter decisions and tighter positioning.
10. Best Practices
Set your Start Prices first, then adjust Change By.
Use keyboard arrows to fine-tune LP Fee.
Keep LP Fee narrow to stay competitive.
Check the Orderbook for real-time positioning.
Start with small quantities to test strategies.
11. Final Thoughts
Magic Eden’s AMM pool experience now offers an elegant, flexible interface for NFT market making. Whether you're buying, selling, or operating both sides of the market, the tools give you complete control over your inventory, pricing, and fee strategies.
Need help? Reach out to the Magic Eden support team via the chat widget on the platform.
Addressing impermanent loss
What is impermanent loss?
Impermanent loss occurs when the price of the assets you deposit into a liquidity pool changes compared to when you initially deposited them. The bigger the price change, the more you are exposed to impermanent loss. The term "impermanent" is used because the price of the asset could return to the original price when you deposited it into the pool. However, if the price does not return to the initial price, impermanent loss becomes permanent loss.
For example, suppose you deposited 20 non-fungible tokens (NFTs) into a liquidity pool with a 5% difference. If the price of the NFTs increases tenfold from the initial price, you may experience impermanent loss. This is because you would have been better off holding the NFTs rather than selling them along the way. However, the price of the NFTs could decrease, and the impermanent loss would no longer be a loss.
Opportunity cost in impermanent loss
In addition to the actual loss of value due to price changes, there is also an opportunity cost associated with impermanent loss. When you deposit assets into a liquidity pool, those assets cannot be reallocated to potentially better-performing assets. This can result in missed investment opportunities and lower returns.
How to mitigate impermanent loss?
It is not possible to completely eliminate the risk of impermanent loss, but there are ways to mitigate it. One way to reduce impermanent loss is by selecting liquidity pools with assets that have lower price volatility. For example, NFTs with stable prices tend to have lower price volatility than NFTs with more variable prices. By selecting a liquidity pool with NFTs that have stable prices, you can reduce your exposure to impermanent loss.
For more information, explore our FAQs or reach out to our dedicated support team.