At Quanto, we are constantly working to provide you with more flexibility and capital efficiency. One of the exciting features we offer is the ability to use your Raydium Liquidity Provider (LP) tokens from the $WSOL/QTO pool as collateral for trading on our platform.
This allows you to put your assets to work in two places at once: earning trading fees from the Raydium liquidity pool while also using the value of that position to back your trades on Quanto.
Key Concepts Explained
Before we dive in, let's clarify a few key terms:
Raydium: Raydium is an Automated Market Maker (AMM) and Decentralized Exchange (DEX) built on the Solana blockchain. It allows users to trade and provide liquidity for various token pairs.
$WSOL: Wrapped SOL ($WSOL) is a token that represents Solana (SOL) on the Solana blockchain in a way that is compatible with DeFi standards. Its price is pegged 1:1 with $SOL. When you add $SOL to a Raydium liquidity pool, it is automatically "wrapped" into $WSOL.
Liquidity Pool (LP): The $WSOL/QTO liquidity pool on Raydium is a program that holds both $WSOL and $QTO tokens. In return for providing liquidity, users earn a share of the trading fees generated by that pool.
Pool address:
2KUEBor9P8e2YVGCUnD9ipmhGM9nL4pG11zeEoQVQZWg
LP Tokens: When you deposit tokens into a liquidity pool, you receive LP tokens in return. These tokens represent your proportional share of the pool. The specific token for this pool is:
Token Name: WSOL/QTO
LP Token Address:
7zpPsugniMiJNbWyv6RYqTLE5XH7gw6XHnWqHrvbGzMM
Benefits of Using LP Tokens as Collateral
Using your $WSOL/QTO LP tokens as collateral on Quanto offers several advantages:
Capital Efficiency: Instead of letting your LP tokens sit idle in your wallet, you can use them to increase your available margin on Quanto.
Compound Yield: You continue to earn trading fees from the Raydium liquidity pool while simultaneously using the same asset as collateral.
Support the Ecosystem: By providing liquidity for $QTO, you help create a more stable and liquid market for the token, which benefits the entire Quanto ecosystem.
How-To Guide: From Raydium to Quanto Collateral
Follow these two main steps to get your LP tokens and deposit them to Quanto.
Providing Liquidity on Raydium to Get LP Tokens
If you don't already have $WSOL/QTO LP tokens, you'll need to get them from Raydium first.
Prepare Your Wallet: Ensure you have both $QTO and $SOL in a Solana-compatible wallet (e.g., Phantom, Solflare).
Go to Raydium: Navigate to the Raydium Liquidity Page.
Connect Your Wallet: Connect the wallet containing your tokens.
Select Tokens: In the liquidity interface, select $QTO and $WSOL as the token pair. If you select $SOL, Raydium will handle wrapping it to $WSOL automatically.
Deposit: Enter the amount of $QTO or $SOL you wish to provide. Raydium will automatically calculate the required amount of the other token.
Confirm: Click "Supply" or "Add Liquidity" and approve the transaction in your wallet.
Once confirmed, you will receive $WSOL/QTO LP tokens in your wallet. You can verify you have the correct token by checking for the mint address in your wallet: 7zpPsugniMiJNbWyv6RYqTLE5XH7gw6XHnWqHrvbGzMM.
Depositing Your LP Tokens to Quanto
Now that you have the correct LP tokens, you can deposit them into your Quanto account.
Log in to Quanto: Access your account on Quanto.trade.
Navigate to your Wallet/Deposit Page: Go to the section of the platform where you manage your deposits.
Initiate a Deposit by Selecting the LP Token: From the list of supported assets, select "QSR".
Get Your Deposit Address: The platform will display your unique Quanto deposit address for this LP token.
Send from Your Solana Wallet: Open your Solana wallet, select the $WSOL/QTO LP token (mint address
7zpPsugniMiJNbWyv6RYqTLE5XH7gw6XHnWqHrvbGzMM), and send it to the deposit address provided by Quanto.CRITICAL: Only send $WSOL/QTO LP tokens to this address. Sending any other asset will result in a permanent loss of funds.
Confirmation: After the transaction is confirmed on the Solana network, the LP tokens will be credited to your Quanto account and will automatically be included in your collateral balance.
Important Considerations & Risks
Valuation: The collateral value of your LP tokens on Quanto is determined by the total value of the underlying $QTO and $WSOL in your share of the pool. This value will fluctuate with the market prices of both tokens.
Impermanent Loss: As a liquidity provider, you are exposed to "impermanent loss." This occurs when the price ratio of $QTO and $WSOL changes after you deposit them. You can learn more about this risk in our detailed guide on Impermanent Loss below.
Liquidation Risk: As with any collateral, if the value of your LP tokens drops significantly, your account may be subject to liquidation. Please manage your risk and maintain a healthy margin level.
Impermanent Loss (IL)
Impermanent loss occurs when the price of your deposited tokens changes relative to each other after you've added them to a pool. It’s called “impermanent” because the loss disappears if prices return to their original ratio - but if you withdraw while the imbalance exists, you realize the loss.
Let’s walk through three different scenarios:
Example A: SOL goes up, QTO goes down
You deposit:
1 SOL = $100
100 QTO = $100
Total = $200
Later:
SOL = $200
QTO = $0.50 (100 QTO now worth $50)
If you held the tokens: $250
In the pool:
Rebalancing gives you less SOL, more QTO.
Your share is now worth ≈ $212.13
→ IL = -15.15% ($37.87 loss compared to just holding)
Example B: SOL goes up 10%, QTO goes up 50%
You deposit:
1 SOL = $100
100 QTO = $100
Total = $200
Later:
SOL = $110
QTO = $1.50 (100 QTO = $150)
If held: $260
In the pool:
Because QTO gained more, the pool sold QTO for SOL to maintain balance.
You now have less QTO and more SOL
Your LP position = ~$243.75
→ IL = -6.25% ($16.25 loss)
⚠️ Even though both tokens went up, you still made less than just holding.
Example C: SOL goes down, QTO goes up
You deposit:
1 SOL = $100
100 QTO = $100
Total = $200
Later:
SOL = $80
QTO = $2.00 (100 QTO = $200)
If held: $280
In the pool:
The pool sells QTO for more SOL as QTO gains value.
You end up with less QTO and more SOL.
Your LP value ≈ $251.85
→ IL = -10.66% ($28.15 loss)
So even in “bullish” conditions, LPs can suffer IL due to price divergence.
Summary: When Does IL Happen?
Price Movement | IL? | Why |
Both tokens move together | Low to none | Ratio unchanged |
One token moves, other stays | Moderate | Divergence |
Tokens move oppositely | High | Maximum divergence |
These examples highlight why LP incentives are so valuable: they offset IL and keep liquidity provisioning attractive.
Providing liquidity to the $WSOL/QTO pool on Raydium can be a rewarding experience, both in supporting the QTO ecosystem and earning potential returns. However, it's essential to understand the associated risks and monitor your investment regularly.