How-to
Provide liquidity
Post a sealed LP quote that absorbs the imbalance at Popen plus or minus your spread.
Buys and sells in a lull rarely balance. After they match at Popen, liquidity providers (LPs) fill what is left of the heavy side. An LP posts a sealed quote with a spread. The quote sells AAPLx above Popen when buyers are heavy, or buys AAPLx below Popen when sellers are heavy.
The quote#
| Field | Unit | Meaning |
|---|---|---|
| Spread | bps | how far from Popen the quote fills |
| Max base | AAPLx | the most the quote sells if buyers are heavy |
| Max quote | USDC | the most the quote spends if sellers are heavy |
- The spread cannot exceed the market's maximum, 200 bps by default.
- At least one of max base and max quote must be above zero.
- Only one side can fill in a given lull: the side opposite the heavy one.
Lifecycle#
A quote goes through the same steps as an order. In the app, choose LP quote at the top of the order ticket, enter the spread and one or both sizes, and seal it. It then appears with your orders in "Your sealed orders in this lull", with the same Reveal and Claim buttons.
- Seal during the commit phase. The commitment hashes the spread, max base, max quote, a salt, your address and the lull. The quote posts the same bond as an order, so nobody can tell it from an order until it is revealed.
- Back up the salt. See Back up sealed orders.
- Reveal in the reveal window. The program checks the spread and the number of quotes, then locks both max base and max quote in full from your free balance.
- Claim after the cross. Your fill settles, the unused parts of both locks return to Free, and the bond and rent return to your wallet.
A lull accepts at most 8 quotes, and slots go in reveal order. A quote revealed after all 8 are taken is rejected. It cannot be revealed later in that lull, so its bond is forfeited. The lull page shows how many quotes have been revealed.
How fills are priced#
Each quote fills at its own price, pay-as-quoted:
- buyers heavy: the quote sells AAPLx at Popen × (1 + spread);
- sellers heavy: the quote buys AAPLx at Popen × (1 − spread).
Quotes fill cheapest spread first, and quotes with equal spreads fill in reveal order. A wider quote never fills while a cheaper one still has room. The last quote to fill may fill only in part.
A fill never exceeds max base when selling, or max quote when buying. Rounding on the LP leg goes in the LP's favor, so every LP gets at least its quoted price.
Example, with hypothetical numbers: Popen is $200.00 and your spread is 50 bps. If buyers are heavy, you sell at $201.00 per share. If sellers are heavy, you buy at $199.00 per share.
Which orders reach the LP leg#
Only the heavy side's class B orders trade with LPs: market-on-open orders, and limit orders whose limit also clears the worst revealed LP price on their side. The widest revealed spread on that side sets the worst LP price. A wide quote therefore narrows the set of limit orders that can reach any LP. See The cross.
What to know before quoting#
- You commit before the book is visible. The commit phase ends when the reveal window opens. During the window you can watch the imbalance form, but you cannot change your quote. You can only decline to reveal it, which forfeits the bond.
- Both sides are locked. A reveal locks max base and max quote until claim, even though only one of them can fill.
- The price is Pyth's. Fills are priced off the underlying stock's regular-session price, not off any pool.
- A cancelled lull fills nothing. Both locks return in full at claim.