Stable Strategy

Description

Liquidity ranges are set at various bin positions surrounding bin 8388608 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.

Liquidity will only be deployed when the active bin is at bin 8388608, to maintain vault ranges and minimize the impacts of slippage.

Balanced Stable Strategy

Balanced strategies utilize a gaussian type distribution and provide liquidity across a larger range. Over a relatively larger range, the gaussian-like distribution of liquidity results in higher capital utility.

During more volatile market conditions this strategy is expected to outperform a concentrated option.

Concentrated Stable Strategy

Concentrated strategies utilize an even type of distribution and provide liquidity across a tightly concentrated range. Over a relatively tight range, the even-like distribution of liquidity results in higher capital utility.

During more stable market conditions this strategy is expected to outperform a balanced option.

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.

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 bin 8388608 is 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 8388608 may result in some slippage.