Depth Ledger
Volume console
Depth Ledger
Volume console

Reading the money behind the price

A price on a Solana pair is an output. The input is a pair of balances sitting in a pool account, and everything a trader wants to know is a property of those balances rather than of the number they produce.

Depth Ledger works from the reserve side. Each entry begins with what the pool holds, derives what that lets it defend, and stops at the point where reserve data can no longer answer the question. Providing liquidity is a position with real downside, and that is stated here rather than buried.

Open the volume consoleStart with the head entry

The depth ladder

Depth is never one number. It is a series of answers to the same question asked at different distances from the mid price.

mid
The price implied by the reserves themselves, for a trade of zero size. Nobody trades zero size, so this number is a reference point rather than a fill.
-0.5%
The shallowest band worth measuring. If this band is thin, routine trades are already moving the quote and every later reading inherits that noise.
-1.0%
The band most commonly quoted as depth. It is the size that can be traded before the pool price has moved one per cent against the trader.
-2.0%
Where concentrated ranges usually start to run out. A ladder that collapses between one and two per cent is a range boundary, not a shortage of capital.
-5.0%
The exit band. What a position of real size would actually meet on the way out, which is the only number that matters when someone wants out at once.

The four states a pool is in

Almost every liquidity question resolves to which of these four a pool is currently in, and the fastest way to tell them apart is the relationship between the two reserve balances rather than the price they imply. Each state has one tell that is hard to fake because it follows from how the program has to work.

P1Forming

The pool exists and the reserves are still being set. Depth is shallow on at least one side, and the quoted price moves a long way for a small trade.

Liquidity events outnumber swaps in the same window.

P2Carrying

Reserves are stable, swaps dominate the transaction mix, and the quoted price returns towards where it was after ordinary two-sided flow.

Reserve product creeps up from fees while the ratio stays near where it started.

P3Draining

Reserves fall on both sides at once, which no swap can do. Somebody is redeeming LP tokens, or a concentrated position has been closed.

Both balances shrink in the same transaction, keeping the ratio roughly intact.

P4Migrated

The venue holding the depth has changed. The old pool may still quote a price, but it is quoting against reserves that nobody is defending.

A new pool for the same pair appears while the old one stops receiving flow.

Featured ledger entries

Four entries carry the argument of the site. Each opens with the question it answers, works through the mechanics from published protocol behaviour, and marks every invented figure as invented.

02How a pool holds a price

Two balances and one invariant produce every quote a constant-product pool has ever given. What that means for size, for slippage, and for the difference between a quote and a fill.

Read the mechanics

03Reading depth properly

Why total value locked answers almost nothing, how to read depth at a stated distance from mid, and what a concentrated range does to a ladder that looked healthy a moment earlier.

Read the method

Two sections, one account

Pools covers the standing state of a market: reserves, depth, LP positions and the arithmetic that connects them. Flows covers the movement: liquidity arriving, rotating between venues, and leaving. An entry belongs to whichever question it opens with.

Pools

How a pool sets a price from its reserves, how far that price holds before it bends, what happens the moment you add or remove liquidity, and why an LP position can be worth less than the two assets held on their own.

Open the section

Flows

Liquidity is not a number, it is a balance that somebody keeps topping up or withdrawing. These entries follow the movement: where it comes from, why it leaves, and how to watch it change without staring at a chart.

Open the section

The vocabulary, written to be usable

Most liquidity glossaries define a term by rearranging it. Reserves are the assets held in reserve; an LP token is a token held by a liquidity provider. That kind of entry teaches nothing and quietly hides the part a reader actually needs.

The glossary on this site takes the opposite approach. Each of the thirty terms gets one paragraph that says what the thing is, what it does to a position, and the mistake most often made about it. Where a term is used loosely across the ecosystem, the entry says so rather than pretending there is one settled meaning.

It is the reference the rest of the site leans on. Entries link into it instead of stopping to redefine a term every time it appears, which keeps the argument of each entry intact.

Open the liquidity glossary

Terms this ledger uses precisely

  • Depth at a stated distance, never depth as a synonym for total value locked.
  • Reserves as the two balances in the pool account, not as a claim about ownership.
  • Impermanent loss as a comparison against holding, not as a cost you are billed.
  • Migration as depth moving venue, not as any transfer that happens to be large.
  • Lock as a constraint on a specific LP position, not as a guarantee about a token.
  • Concentrated range as an interval outside which a position stops quoting entirely.

Depth reacts to activity

The two halves of a market are not independent. Depth decides what trading costs, and sustained trading decides who is willing to supply depth. Fee income accrues to providers in proportion to the flow that passes through their range, so a pool that carries steady turnover pays its providers to stay while a quiet pool pays them nothing to sit exposed.

That feedback is why an entry about reserves keeps running into questions about activity, and why the flows section exists at all. It is also why a reader studying pool behaviour eventually wants to see the other side: the tooling that puts routed, scheduled trading through Solana venues, and what its operators can and cannot control about where that flow lands.

The link below opens a commercial volume platform rather than a research page. It is here because the supply side of turnover is genuinely part of this subject, not as a recommendation, and nothing about it changes the risk that an LP position ends up worth less than the two assets held alone.

See how activity meets depth

Where activity touches the reserve side

  • Fee accrual, which only happens when swaps route through the range a position covers.
  • Range utilisation, which decides whether a concentrated position is earning or idle.
  • Routing share, since a pair quoted on several venues splits its flow between them.
  • Price pressure, because sustained one-sided flow changes the reserve ratio itself.
  • Provider retention, as a pool with no flow gives its providers no reason to stay.
  • Migration timing, since flow usually follows depth to the new venue within minutes.

How this ledger is kept

Three rules decide what gets written here and, far more often, what gets left out.

Reserves before narrative

An entry starts from what the pool account holds and what the program does with it. Explanations that cannot be traced back to a balance, a fee parameter or a documented instruction are labelled as interpretation and kept separate from the mechanics.

That ordering is deliberate. A story about why liquidity moved is easy to write and almost impossible to check, while the movement itself is recorded and can be read directly.

Invented numbers are marked

Worked examples are the only honest way to teach pool arithmetic, so this site uses them constantly. Every one carries a stamp saying the figures are illustrative, and no example is presented as a measurement of a real pool, a real position or a real return.

No yields are quoted anywhere. A fee rate is a protocol parameter and can be stated; what it earned somebody is not something this desk knows.

The downside stays in the text

Supplying liquidity can leave a position worth less than simply holding the two assets, and no amount of fee income guarantees the gap is covered. That sentence appears in the entries themselves rather than in a disclaimer nobody reads.

Nothing on this site is advice about what to do with money. It describes how the machinery behaves; what to do about that is a decision this desk has no basis for making on anyone's behalf.