Stable Strategy

Description

Liquidity ranges are deployed at set tick ranges surrounding the $1 price range depending on backtesting results. For more volatile stablecoin pairs, wider bin ranges will be used. For less-volatile pairs, narrower bin ranges will be used.

Two liquidity ranges will be deployed within each vault to create a Gaussian distribution, that is liquidity be highest at the active price range (usually $1) and tapered off at ticks around this price range. This is based on backtested data and dramatically increases liquidity utilization and swap fee rewards.

Applicable Pool Types

Stable-stable asset pairs closely trading in parity

Example Pools: USDC.e-USDC, USDT-USDC, USDT.e-USDT

Advantages

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

• The strategy will enable LPs to capture a large range of profitable swap fees.

• The strategy is non-rebalancing to mitigate the impacts of IL.

• Multiple ranges within a single vault allow higher capital efficiency and higher swap rewards.

• Socialization allows for the reduction of gas fees.

Risks

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

• During times of high volatility fee APRs will temporarily drop to 0% until trading occurs at a healthy peg price.