Innovations in decentralized exchanges often try to balance out the experience for traders and liquidity providers. Uniswap’s v3 implementation was revolutionary in how it brought about the concepts of concentrated liquidity and active liquidity management. It helps increase the capital efficiency and provides deeper liquidity for traders but at the same time, makes it much more difficult for retail LPs to understand and earn sustainable yield due to the higher risk that comes with it. Recent conversations regarding Uniswap v3 have also highlighted the higher impermanent loss risk for liquidity providers.
Range Protocol has been created to solve this problem and tilt the scale back in the favor of liquidity providers.
Range Protocol will be the infrastructure for Active Liquidity Managers (ALMs) to manage liquidity for passive LPs on top of active liquidity management DEXs like Uniswap v3. Liquidity Providers with different risk profiles can earn passive yield while Active Liquidity Managers can build strategy on top of DEXs like Uniswap v3.
One of our offerings to cater to LPs of different risk profile will be our tranche based strategies.
Senior Tranche will offer fixed yield to LPs set by ALMs.
Junior Tranche will have a second lien on the vault’s asset and will offer a variable yield based on the vault’s return.
There are a few protocols like Arrakis, Gamma that have tried to abstract this complexity of active liquidity management for passive LPs. The current narrative has been more focused on fungible LP token wrapper to incentivize Uniswap v3 liquidity with the same incentive models that were deployed for Uniswap v2. In the process, most non soft pegged pair vaults often have very wide price ranges which in a way, replicate Uniswap v2 again. This does not utilize the real capabilities of Uniswap v3.
One of our innovations like Liquidity Enhancing Strategies will offer the most capital efficient way for project teams to have deeper liquidity. Details on this and our other strategies deserve an entire medium article that we will post at a later stage.
Our team comes from a prior experience in digital asset market making and OTC trading operations. Quantitative Research is core to our operations and we plan to deploy our proprietary research for Range protocol strategies. Some of our innovations require a robust trading infrastructure which gives us a strategic edge over other active liquidity management protocols.
Join our journey as we bring mass adoption to crypto by on chain liquidity management
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