Concentrated Liquidity Management

Active Management for Concentrated Liquidity Protocols

Introduction

Uniswap V3 introduced the concept of concentrated liquidity ranges which increases capital efficiency and massively improves returns. Soon enough, the protocol was deployed on multiple chains and adopted by several other solutions such as QuickSwap.

The problem is, it's extremely hard to predict optimal ranges as well as liquidity distribution. Meanwhile, picking incorrect ranges leads to massive impermanent loss. Figuring out and managing this optimal ranges is an extremely daunting task even for the best of DeFi natives.

Liquidity providers on Uniswap need to start by predicting the optimal range, followed by the optimal capital for the position. This has proven to be an exceptionally hard task, even for experienced users.

If you decide to go for a concentrated position, it will gather higher returns but is likely to fall out of range quickly. Similarly, if you choose to go for a wider range, it will gather significantly lower returns but will stay there longer.

Either way, no matter which one you go for you'll have to readjust liquidity every once in a while which requires at least 3 transactions per position. Not even including the resources spent on monitoring the position.

Metavisor eliminates all of that, in entirety, while generating significantly higher returns than doing it yourself.

Solution

Metavisor optimizes and actively manages your position for you, keeping it in optimal ranges for maximum gains and automatically balancing it when necessary leading to greater capital efficiency and higher returns.

All vaults are monitored by the Metavisor protocol and automatically adjusted as necessary. You do not need to monitor your positions, or pay for gas fees for rescaling them.

Additionally, by doing this for all capital in the vault at once, it maximizes efficiency and reduces gas costs by a significant factor. We also automatically compound assets in the vault, since Uniswap V3 does not natively compound.

After all, money saved is money earned.

Vaults

Metavisor offers two type of vaults for each pair. They are categorized as "Aggressive" and "Balanced"

Aggressive Vaults

Aggressive vaults are optimized for maximum returns and are recommended for relatively stable pairs. These vaults are significantly more concentrated as compared to Balanced vaults and hence incur comparatively higher impermanent loss on price movement.

This type of vault is recommended for people which higher risk tolerance and is more effective for pairs that have high volume and low price delta. Alternatively, this vault is also especially for for volatile pairs that have an insanely high volume multiple since it's far more likely to balance the fees with impermanent loss when it occurs.

These vaults scale extremely quickly and sharp price movements can incur noticeable movement in prices very quickly.

Balanced Vaults

Balanced vaults are optimized for balanced returns and minimizing impermanent loss. These vaults are specifically crafted to concentrated enough to earn significant fees while minimizing any losses.

This type of vault is recommended for people who are less adverse to risk and would like to have a very off-hands approach to providing liquidity. These vaults are more closely monitored and rescaled only when necessary to avoid impermanent loss.

These vaults scale relatively quick but are less prone to sharp movements. These vaults also have a significantly lower maximum drawdown as compared to aggressive vaults.

These vaults are mostly preferred by people who are looking from purely an investment standpoint.