Pegged Pair Strategy
Strategy One (Constant price, non-rebalancing)
Description
Liquidity ranges are set at various bin positions surrounding bin 8388608 depending on backtesting results. For more volatile pegged pairs, wider bin ranges will be used. For less-volatile pairs, narrower bin ranges will be used.
Liquidity will only be deployed when the active bin is surrounding or at bin 8388608, to maintain vault ranges and minimize the impacts of slippage.
Applicable Pool Types
Stable-stable asset pairs trading out of parity or pegged pairs trading around a constant price
Example Pools: WBTC.e-BTC.b
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.
Risks
During times of high volatility in the markets, the allocation of assets could vary quite significantly from 50/50.
Compounding and deposits during highly volatile times will not be deposited until either
bin 8388608or surrounding bins are reached, which may lead to temporarily lower APRs.The liquidity book requires deposited reserves to meet a bin's composition. As such, amounts deposited when the active bin is outside of
bin 8388608may result in some slippage.
Strategy Two (Proportional price, rebalancing)
Coming Soon!
Description
Coming soon!
Applicable Pool Types
Related asset pairs which do not trade at a constant value, but trade in close sequence
Example Pools: sAVAX-AVAX
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