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Dynamic Range Strategy

Description

Liquidity ranges are automatically rebalanced when certain rebalance triggers are hit. As the moving average price of the token pair crosses the predefined rebalancing triggers a rebalance is conducted.

Upon rebalancing the liquidity range is recentered around the currently active price, any remaining tokens are deployed within a second range using a "fill-up" style liquidity strategy.

No tokens are swapped during a rebalance to mitigate any impacts caused by swap fees or slippage.

Applicable Pool Types

Stable-volatile pairs, volatile-volatile asset pairs

Example Pools

AVAX-USDC, WETH.e-USDC, BTC.b-AVAX

Advantages

  • Rebalancing is executed automatically allowing for the optimization of liquidity to active price ranges.

  • Accrued fees will be compounded back into the position regularly on behalf of LPs compounding yield.

Risks

  • During times of high volatility in the markets, the allocation of assets could vary quite significantly from 50/50.

  • Impermanent loss may erode returns relative to your benchmark during times of high volatility and insufficient fees.

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