Core concepts
DLMM
What is DLMM?
A Discretized Liquidity Market Maker (DLMM) divides the price curve into discrete bins. Each bin represents one fixed price and holds its own token reserves.
Liquidity providers choose which bins to fund. Traders use the liquidity in the active bin first, then move through the next available bins when a swap requires more liquidity. This lets LPs concentrate capital around the prices where they expect trading to occur.
| Feature | DLMM | Concentrated liquidity |
|---|---|---|
| Price unit | Fixed-price bins | Price ranges between ticks |
| Swap behavior | Fixed price within a bin, then steps to another bin | Price changes continuously through active liquidity |
| Position format | Fungible shares in each funded bin | NFT position covering a tick range |
| LP fee accounting | Retained in bin reserves and reflected in share value | Accrued to the position for collection |
As of July 29, 2026, Ramses DLMM is deployed on Robinhood Chain in fee-only mode. Deployment status and configuration can change; see the live technical deployment reference for the latest documented snapshot.
How bins work
Bin step
The bin step controls the percentage difference between neighboring bins. A bin step of 1 represents one basis point, or 0.01%, between adjacent price levels. A larger bin step creates more distance between bins.
Each pool has one active bin:
- Bins on one side of the active price hold one token.
- Bins on the other side hold the other token.
- The active bin can hold both tokens.
The exact token on each side depends on the pool's token ordering.
Price movement
A swap executes at one fixed price while it remains within a bin. When that bin no longer has enough liquidity for the trade, execution continues at the next non-empty bin. Empty bins can be skipped.
Crossing more bins means greater price impact. The app's minimum received and slippage settings protect users if the available liquidity or price changes before execution.
Providing liquidity
Choosing a range
An LP selects a range of bins and deposits the token amounts needed for that range. The position earns fees only in bins used by swaps.
A narrow range concentrates more capital near the current price and can earn more while active, but it is also more likely to move out of range. A wider range covers more price movement but spreads the same capital across more bins.
As the market moves:
- Liquidity near the active bin can hold both tokens.
- Liquidity away from the active bin becomes one-sided.
- A position outside the traded bins does not earn swap fees until trading returns to its range.
Fees auto-compound
The LP portion of swap fees stays inside the bins and increases the reserves backing their shares. LPs do not make a separate claim for these fees; they are received when liquidity is removed.
Adding liquidity with a token ratio that differs from the active bin's composition can incur a composition fee. The app displays transaction details before submission.
Removing liquidity
Removing liquidity burns the holder's bin shares and returns the corresponding share of the bin reserves. Only the share holder or an approved operator can burn those shares; protocol configuration controls do not provide a general withdrawal path for user principal.
Fees and rewards
DLMM swap fees combine:
- A base fee determined by pool configuration.
- A variable fee that reacts to recent on-chain bin movement and trading activity.
The variable component does not read prices or volatility from a centralized exchange. The combined swap fee is capped by the contracts, and current parameters should be checked in the app or on-chain before trading.
| Pool state | LP share of swap fees | Voter/protocol share | Emissions |
|---|---|---|---|
| Fee-only (ungauged) | 95% | 5% to the protocol/Sarcophagus | None |
| Gauged | 0% | 100% to voters | Eligible |
The current Robinhood Chain deployment is fee-only. It does not currently have live gauge reward hooks, so LP returns come from the LP share of swap fees rather than emissions.
Risks
DLMM liquidity carries many of the same risks as other concentrated liquidity:
- Inventory risk: swaps can leave a position holding mostly or entirely one token.
- Out-of-range risk: bins away from trading activity do not earn fees.
- Impermanent loss: relative token price changes can make LP returns lower than simply holding the assets.
- Price impact and slippage: thin or widely separated liquidity can produce worse execution.
- Dynamic fees: the fee paid by a trader can change with on-chain activity.
- Smart contract and configuration risk: contracts, integrations, and administrative settings can contain defects or change over time.
Only provide liquidity to assets and ranges whose risks you understand.