Gamma Public
An overview of Gamma's public suite for actively managed concentrated liquidity pools
With the introduction of concentrated liquidity on Uniswap V3, Sushi Trident, and other platforms, a need has arisen for concentrated liquidity managers (CLMs).
Gamma's technology stack can offer non-custodial, automated, concentrated liquidity management services to the public.
Gamma Public's pools can adopt new strategies without migration thanks to Hypervisor technology.
Gamma Public has access to external and internal liquidity mining programs. Gamma Public also includes a dedicated analytics user interface to provide critical data, statistics, and charts for the user.
Providing liquidity to concentrated liquidity platforms is significantly more difficult than providing traditional liquidity because liquidity providers are required to provide liquidity at set price ranges. If the price of the underlying asset moves outside of the set price range, the LP no longer earns fees without re-adjusting the price ranges.
Concentated liquidity in action at Uniswap V3
For example, if a user provides liquidity for the ETH-USDT pair at a price range between $2,500 - $3,000, and the price of ETH rises above $3,000, the user will no longer earn fees.
The narrower the range that liquidity is provided, the greater the capital efficiency and the greater the yields the LP may earn. But, these tight ranges come with increased risk (impermanent loss)
Gamma's Hypervisor / Supervisor contracts automatically manage the price ranges, rebalance assets, and re-invest earned fees to generate yields optimally. This approach is superior to a passive LP option.
Gamma Public's pools earn trading fees at a marked percentage (0.01%, 0.3%, 0.05%, etc.). Higher pool volumes (more trading activity) translate into more fees for the pool.
Users earn fees based on their proportional ownership of the pool. If a user owns 15% of a pool that earned $1,000 in fees that day, they would be expected to earn about $150 in fees, minus deductions for Gamma stakers and rebalance fees.
The Annual Percentage Returns (APRs) on the dashboard refer strictly to fee-based APR, which is the total fees earned as of the last compounding event divided by the current value of assets. The APRs currently do not reflect impermanent losses or the change in valuations of the underlying assets.
Fees generated by a pool
Fees are auto-compounded in pools for greater returns and efficiency on compounding events. This is also when a percentage of fees are taken and provided to GAMMA stakers via the "Swap" contract.
Impermanent loss is the primary enemy of concentrated liquidity management and Gamma.
Impermanent loss happens when you provide liquidity to a liquidity pool, and the price of your deposited assets changes compared to when you deposited them. The bigger this change is, the more you are exposed to impermanent loss. In this case, the loss means less dollar value at the time of withdrawal than at the time of deposit.
Liquidity pools that contain assets that remain in a relatively small price range will be less exposed to impermanent loss. Stablecoins or different wrapped versions of a coin, for example, will stay in a relatively contained price range. These pools will generate fewer fees, though.
Concentrated liquidity platforms have significantly better capital efficiency and fee production, but they also can amplify the effects of impermanent loss.
Gamma's Supervisors attempt to mitigate impermanent loss through smart rebalancing, anticipating market conditions, evaluating metrics, and more.
Gamma Public deposits are dual-sided. Users deposit assets directly in proportion to the assets in the pool. Gamma Public pools are rarely at 50-50 and can change rapidly with price changes. Therefore, users need to note when they enter and exit a pool.
Gamma Public withdrawals are dual-sided. Users will receive assets directly in proportion to the assets in the pool, regardless of what the user originally deposited.
When providing liquidity into Gamma Public's pools. Users will be given an ERC-20 LP token. These tokens and be used for a variety of special programs.
Gamma Public offers internal (on the Gamma App) and external (on 3rd party sites) liquidity mining programs for users. Guides to each liquidity mining program will be posted in the Guides section. The programs' terms, emissions rates, and mechanics are variable. Please consult each program for specifics.
Gamma has a limited analytics suite that shows basic ranges against price movement over time. We are continuously hoping to expand our internal and external analytics suites.
Last modified 12d ago