🌊Liquidity

Automate your Trader Joe V2 Liquidity

With the introduction of concentrated liquidity on Trader Joe V2, SteakHut has created a concentrated liquidity management service, to automate liquidity management for LPs, protocols, and token pairs.

SteakHut offers a diverse range of liquidity provisions using our passive and actively managed liquidity vault structures.

SteakHut simplifies the process of concentrated liquidity. This saves time and resources for liquidity providers across Avalanche.

The Downfalls of Traditional Liquidity

SteakHut liquidity is a necessary response to the many downfalls that protocols and liquidity providers face across traditional liquidity options:

Fragmented Liquidity: Liquidity has become fragmented across blockchains, DEXs, and price ranges.

Stagnant Liquidity: In constant-function AMM models, liquidity is spread thinly across an infinite price range. Meaning liquidity is deployed inefficiently, leading to lower efficiencies and lower swap fee rewards.

Expensive Liquidity: The traditional approach to liquidity is a costly endeavor for protocols seeking liquidity. Liquidity is deployed in an inefficient way and token emissions are used to incentivize liquidity in a model that introduces inflation, high costs, and timely off-chain processes for liquidity seekers.

Complex liquidity: Next-generation concentrated liquidity AMMs drastically improve upon the downfalls of traditional liquidity, however often at the cost of added complexity. Concentrated liquidity can make it difficult to manage and optimize liquidity.

Impermanent loss: Concentrated liquidity AMMs introduce further risks to LPs, with a large majority of LPs receiving negative returns after factoring in impermanent loss. Variable fees introduced by the Liquidity Book solve this problem by adding further rewards for LPs during times of volatility.

Time-intensive liquidity: Concentrated liquidity removes the set-and-forget liquidity options LPs have grown accustomed to. In order to optimise liquidity, LPs will be required to manage, redistribute and reinvest rewards manually.

Passive Liquidity Provisions

Many liquidity providers will be accustomed to depositing their tokens into a liquidity pool or farm and passively earning rewards. SteakHut’s passive liquidity provisions offer LPs a range of “set-and-forget” liquidity options to deposit their tokens and optimize their returns.

Once deposited, your tokens will be rebalanced and reinvested automatically by our contracts. This will work to ensure that your liquidity always operates within the bounds of the strategy you choose, saving you time and gas having to manage your own liquidity daily.

Active Liquidity Provisions

Liquidity should not be treated as a one-size-fits-all approach. The liquidity Book allows for endless ways to structure your liquidity depending on your risk tolerance and objectives.

SteakHut allows for “Strategists” to also create actively managed vault strategies. Users can read the philosophy behind the strategies, check past performance and easily stake their tokens into the strategy.

Strategists are then able to structure liquidity and call a rebalance and reinvest as required to manage the liquidity around their investment philosophy.

Liquidity as a Service

For protocols operating with Trader Joe LP tokens or holding POL, SteakHut’s active liquidity product offers a new primitive to create liquidity strategies.

For lending protocols, this allows concentrated liquidity pairs to be accepted as collateral. The protocol can then create permissionless strategies of various complexities. SteakHut will then act as the liquidity layer rebalancing and compounding liquidity around the set standards.

With SteakHut you can create your own permissionless automated liquidity provision strategies.

LP Tokens

When providing liquidity into SteakHut Liquidity. Users will be given an ERC-20 LP token as the vault receipt token. These tokens act as an ERC-20 wrapper for Trader Joe DEXV2 liquidity and can be used by partnering protocols for a variety of utilities.

Liquidity Performance Fee Structure

Stable/Stable Pairs (ex USDC/USDT)= 5%

Pegged Pairs (ex WBTC.e-btc.b) = 5%

Non-Stable Pairs (ex AXAX/USDC)= 10-15%

Custom strategies = 10-20%

SteakHut's focus is on delivering low fees and large returns to liquidity providers. The fee will vary depending on the token pair and the pooling strategy you are deposited in. For more information refer to Fees and Rewards.

For a fee breakdown on your strategy select "Information" on your strategy within the SteakHut dApp.

Fee Example:

User stakes: $1000 in USDC/USDT passive strategy with a fee of 5%.

User yields: 20% from swap rewards

Over the course of 1 year, the user accrues $200 in rewards. A 5% performance fee is acquired on the rewards, meaning the user accrues $10 in fees and keeps $190 of rewards.