Single-Sided AMM: What It Is and Why It Matters in DeFi

When you think of single-sided AMM, a type of automated market maker that lets users provide liquidity using just one asset instead of a token pair. Also known as concentrated liquidity AMM, it solves one of DeFi’s biggest headaches: impermanent loss. Traditional decentralized exchanges like Uniswap forced you to deposit two tokens—say, ETH and USDC—to create a trading pair. If one price moved a lot, you’d lose value just by being in the pool. Single-sided AMMs change that. They let you put in just one token and still earn fees, without the risk of losing half your deposit to price swings.

This isn’t magic—it’s smart math. Projects like Concentrated Liquidity, a mechanism that allows liquidity providers to focus their capital within specific price ranges and Liquidity Bootstrapping Pools, a setup that lets new tokens attract initial liquidity without requiring paired assets make it possible. They use algorithms to simulate a two-token pool behind the scenes, so your single asset still fuels trades, but you’re not stuck holding a volatile pair. That’s huge for users who want to earn from their crypto without babysitting price charts or worrying about getting wiped out by a sudden dump.

It’s also why you’re seeing this tech show up in DeFi protocols that care about user retention. If you’re holding SOL, you shouldn’t need to buy USDC just to stake it. Single-sided AMMs let you stake your SOL, earn trading fees, and still hold your full position. That’s the kind of simplicity that pulls new users into DeFi. And it’s not just for big coins—smaller tokens use it to bootstrap liquidity without begging for paired assets. The result? More efficient markets, less friction, and fewer people leaving DeFi because they got burned by impermanent loss.

What you’ll find in the posts below are real-world examples of how this tech is being used—and misused. You’ll see how projects like Acala Swap and Ardor DEX handle liquidity, how some exchanges fake single-sided features, and why certain airdrops tied to these systems are either legit or total scams. You’ll also get the lowdown on how on-chain metrics reveal whether a single-sided pool is actually working as promised. No fluff. Just what you need to know before you deposit your next token.