Single-sided LP — a limit order that pays you

Why do we deposit only USDC?

In our strategies the LP position is single-sided — we deposit only USDC, not a SOL+USDC pair. That changes the entire logic of the position.

Two-sided vs single-sided LP

Two-sided LP: You deposit SOL + USDC. If SOL falls, you take a loss on both legs. If SOL rises, part of your SOL is automatically sold off (you give up the upside).

Single-sided USDC LP: You deposit ONLY USDC, in a range below the current price. It's a way of saying: "I'll buy SOL if the price falls. And while I wait, I collect fees."

How does a single-sided USDC LP work?

Position layout

Price ($)
  ^
  |
  88 ─── Current SOL price ────── Upper bound
  |     ████████████████████████
  |     ████████████████████████  ← Your USDC "works" here
  |     ████████████████████████     and generates fees
  |     ████████████████████████
  64 ─── Lower bound ───────────────
  |
  |     (nothing below this)

The point: Your USDC sits in the $64–$88 range. While SOL trades above $88 you hold 100% USDC and earn fees from every swap that touches this range.

What happens as the price moves?

SOL price	Position state	Fees	IL
$100 (above the range)	100% USDC, inactive	None	None
$88 (upper bound)	100% USDC, starts working	Starts accruing	None
$76 (middle)	~50% USDC + ~50% SOL	Accruing	Yes
$64 (lower bound)	100% SOL	Stops	Maximum
$50 (below the range)	100% SOL, inactive	None	Growing

Single-sided LP = a limit order that pays you

Getting paid to wait

A plain limit order: "I want to buy SOL at $64." Then you wait. No reward for waiting.

A single-sided USDC LP ($64–$88): "I want to buy SOL somewhere between $64 and $88." And you collect fees while you wait. If the price falls, you bought SOL. If it doesn't, you earned fees.

It's like getting paid while you stand in the queue.

Limit order vs single-sided LP

	Limit order (exchange)	Single-sided LP
Income while waiting	$0	Fees (e.g. ~68% APR)
Purchase price	One specific price	A range (an average)
Capital "locked up"	Yes	Yes, but it earns
Smart contract risk	None (on an exchange)	Yes

Range depth: −20% vs −28%

Strategy A: −20%

Current price: $88
Range: $70.40 – $88.00

Advantage	Trade-off
Narrower = bigger fees	Falls out of range sooner
Needs less capital	Needs repositioning more often

Strategy B: −28%

Current price: $88
Range: $63.36 – $88.00

Advantage	Trade-off
Wider = repositioning less often	Smaller fees
Better for long-term positions	More IL if the price crosses the whole range

Worked example — Strategy B

Starting parameters

Parameter	Value
SOL price	$88
LP capital	$3,200 USDC
Range	$64 – $88 (−28%)
Protocol	Orca Whirlpool (Solana)
Fee tier	0.30%
Fees	~~68% APR (~~$5.95/day, snapshot — varies)

Scenario 1: SOL stays between $80–$88 (one month)

Fees:     $5.95 × 30 = $178.50
IL:       -$30 (small, the price moved down slightly)
Result:   +$148.50
APR:      +55.7%

Good outcome — fees comfortably exceed IL.

Scenario 2: SOL falls to $70 (one month)

Fees:     $5.95 × 30 = $178.50
IL:       -$254 (significant)
Position: ~29% USDC + ~71% SOL
Result:   -$75.50
APR:      -28.3%

Roughly a wash — fees covered most of the IL. At $70 you're close to the lower bound, so the position is already mostly SOL. If the price recovers toward the top of the range, the IL disappears and the collected fees stay.

Scenario 3: SOL falls to $55 (one month)

Fees:     $5.95 × 20 = $119 (only while it was in range)
IL:       -$450 (position is 100% SOL and the price keeps falling)
Result:   -$331

Negative. This is exactly where options insurance (a put spread) does the work.

IL grows as the price falls deeper into the range → you choose the range depth deliberately (−20% or −28%), not blindly
Price falls below the lower bound → the position becomes 100% SOL → a put spread covers the downside (module 5)
Smart contract risk → we only supply liquidity to the audited Orca Whirlpool (Solana)

Every risk here has a lever. You're not meant to fear it — you're meant to learn how to pick a range and cover the downside.

Why not the SOL side?

You could build a single-sided SOL LP (a range above the current price). But we don't:

Single-sided USDC (below)	Single-sided SOL (above)
We buy SOL cheaper (useful)	We sell SOL higher
SOL stays as collateral	SOL is sold off (collateral gone)
Fits our strategy	Works against the strategy

Single-sided USDC = the backbone of the strategy

Single-sided USDC LP fits our strategies for four reasons:

It adds no extra SOL exposure — we already hold SOL as collateral
If SOL falls — the LP "buys" SOL with a fee discount
Fees offset the borrowing cost — $5.95/day in fees vs $0.77/day in interest
It combines with options — put protection covers the LP's IL

When should you reposition the range?

Situation	What to do
Price is 10% above the upper bound	Consider moving the range up
Price approaches the lower bound (within 5%)	Get ready: close or widen?
Price is below the lower bound	Wait for a recovery, or close
Fees dropped below breakeven	Narrow the range, or close
30+ days with no change	Review whether the range is still optimal

ℹ️

On Solana (Orca/Meteora) repositioning a range costs under $0.01, and on Ethereum it now runs well under a dollar — on any chain you can manage a position actively without gas being a meaningful cost. The real cost of a move is the IL you lock in, not the transaction fee.

Once you've read this table, you'll recognise for yourself when a position is worth moving and when it's better left alone.

Glossary

Term	What it means
Single-sided LP	An LP position with only one token (USDC or SOL)
Limit order that pays	An LP acting as a limit order that also earns fees
Range	The price boundaries within which your money works
Upper/lower bound	The top and bottom edge of the range
Out of range	Price is outside the boundaries — no more fees

Next up: the final lesson of the module — how to collect and reinvest LP income.

Quick check

How does a single-sided USDC LP differ from a plain limit order?

Practice task

0 / 5

Draft a paper single-sided LP plan

Single-sided USDC LP is the backbone of our strategies. Plan a hypothetical position on paper, then try it in the simulator. Takes about 15 minutes.

Do NOT open a real position yet — plan first, then the simulator at /sandbox/3-orca-lp. For real money you are still missing the options insurance layer (module 5).

This is learning, not investing — use only small amounts you treat as tuition.

You just built a single-sided LP plan with an action for every scenario and you know what covers the downside — most people never plan that far.