Part 2: Advanced Strategies
This is the 2nd of a 2 part series exploring the flexible strategies you can deploy on the Liquidity Book AMM.
Understanding the strategies that are accessible to you, will enable you enhance your yield farming efficiency.
Lets explore 👇
🌊📘
This is the 2nd of a 2 part series exploring the flexible strategies you can deploy on the Liquidity Book AMM.
Understanding the strategies that are accessible to you, will enable you enhance your yield farming efficiency.
Lets explore 👇
🌊📘
Ranged Limit Orders🌊📘
Users can use single-sided one-bin spot liquidity to place "limit orders" outside of the current price.
Once the price reaches these bins, liquidity in them will be converted from one token to another.
Users can use single-sided one-bin spot liquidity to place "limit orders" outside of the current price.
Once the price reaches these bins, liquidity in them will be converted from one token to another.
Ranged Limit Orders🌊📘
Advantages:
✅Buy/sell tokens at prices you want
✅ Withdraw/change your order at any time
Drawbacks:
❌Doesn't earn fees while inactive
Considerations:
❓ Require withdrawing to prevent converting back
Advantages:
✅Buy/sell tokens at prices you want
✅ Withdraw/change your order at any time
Drawbacks:
❌Doesn't earn fees while inactive
Considerations:
❓ Require withdrawing to prevent converting back
Depeg Bets🌊📘
Spot shape is perfect for providing liquidity for stablecoin pairs, it can also be used to capture fees during minor depegs.
Combining two spot shapes above and below the current price can even allow users to earn from depegs in both directions.
Spot shape is perfect for providing liquidity for stablecoin pairs, it can also be used to capture fees during minor depegs.
Combining two spot shapes above and below the current price can even allow users to earn from depegs in both directions.
Depeg Bets🌊📘
Advantages:
✅Earn fees from volatility
✅Help contribute to market stability
Drawbacks:
❌Risky if depeg is permanent
Considerations:
❓ Similar to limit orders, this approach earns no fees while inactive
Advantages:
✅Earn fees from volatility
✅Help contribute to market stability
Drawbacks:
❌Risky if depeg is permanent
Considerations:
❓ Similar to limit orders, this approach earns no fees while inactive
DCA While Earning🌊📘
Combining a one-sided bid-ask shape with uniform distribution can allow you to buy your favourite tokens for cheap if an opportunity arises while continuing to earn fees from swaps around the current price.
Combining a one-sided bid-ask shape with uniform distribution can allow you to buy your favourite tokens for cheap if an opportunity arises while continuing to earn fees from swaps around the current price.
DCA While Earning🌊📘
Advantages:
✅Stable fee revenue
✅DCA at selected prices
Drawbacks:
❌Sacrifices some fee performance for the DCA opportunities
Considerations:
❓ If the order fills it needs to be withdrawn
Advantages:
✅Stable fee revenue
✅DCA at selected prices
Drawbacks:
❌Sacrifices some fee performance for the DCA opportunities
Considerations:
❓ If the order fills it needs to be withdrawn
Gradual Ladder Orders🌊📘
Layering multiple spot uniform shapes on top of each other in one direction allows users to gradually scale in and out of positions with market movements.
Layering multiple spot uniform shapes on top of each other in one direction allows users to gradually scale in and out of positions with market movements.
Gradual Ladder Orders🌊📘
Advantages:
✅Earn fees if the market moves in your favour
✅Passively buy/sell tokens at regular intervals
Drawbacks:
❌Big risk of IL if the market moves against you
Considerations:
❓ Require withdrawing to prevent converting back
Advantages:
✅Earn fees if the market moves in your favour
✅Passively buy/sell tokens at regular intervals
Drawbacks:
❌Big risk of IL if the market moves against you
Considerations:
❓ Require withdrawing to prevent converting back
Sell/buy Walls🌊📘
Combining normal and uniform shapes can allow liquidity providers to form liquidity "walls".
This way the liquidity is much deeper one side of the price while keeping exposure in case price moves in the opposite direction.
Combining normal and uniform shapes can allow liquidity providers to form liquidity "walls".
This way the liquidity is much deeper one side of the price while keeping exposure in case price moves in the opposite direction.
Sell/Buy Walls🌊📘
Advantages:
✅Contribute to price floors while earning fees
✅Less risky than ladder orders approach
Drawbacks:
❌Can result in IL if the price moves beyond the wall
Considerations:
❓ Price movements can result in wall needing rebalancing
Advantages:
✅Contribute to price floors while earning fees
✅Less risky than ladder orders approach
Drawbacks:
❌Can result in IL if the price moves beyond the wall
Considerations:
❓ Price movements can result in wall needing rebalancing
That wraps up Part 2 learning series!
With Liquidity Book, you can deploy any strategy of your choosing, simply by constructing the right Liquidity Shape.
If you've enjoyed this thread don't forget to ♻
Liquidity Book deploys in the coming week(s)
#LFJ
🌊📘
With Liquidity Book, you can deploy any strategy of your choosing, simply by constructing the right Liquidity Shape.
If you've enjoyed this thread don't forget to ♻
Liquidity Book deploys in the coming week(s)
#LFJ
🌊📘
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