Welcome back MEV enthusiasts to your weekly splash of LP news! In today’s edition, we’ve got some Poolfish updates to share, an illuminating interview with an active LP, an inside scoop on an exciting LP automation tool, and more first-hand wisdom from across the DeFi world.
On the docket today:
A Candid Conversation with a LP
Status-quo of Uni V3
Curb your Enthusiasm…for Impermanent Loss - Poolfish partners with Aperture Finance
New frontiers - Poolfish expands support to new decentralized exchanges
Total Volume + Fees
Interview with an LP
In our relentless pursuit of LP tips, we recently decided to pick the brain of an active LP who's maneuvered through the currents of almost 200 liquidity positions. Our anonymous LP was gracious enough to share their experiences with us and some pearls of wisdom.
Our LP is a big believer in data and use their own statistical analysis to discover pools worth their time and money. They were also quick to mention that their decisions are frequently informed by Poolfish in conjunction with their own research.
Their due diligence includes looking at myriad of indicators using the Poolfish simulator, such as the liquidity distribution, TVL, the fees accrued in the past 24h as well as correlation metrics between the tokens. Our LP mentioned that since simulators are not 100% robust every time, they look at real time metrics on platforms such as Revert.Finance and Zapper.
Their current open LP positions include PNDC/WETH pair for which they used Poolfish as a guiding compass. In the last 24 hours they accrued a whopping 20% on their portfolio.
Despite the tumultuous nature of the crypto seas in the past year, namely the FTX fiasco and the FCC regulations, our LP reports an average profit of 1% a day.
They underscore the inherent risks in LP investments, namely impermanent loss, which can lead to value ebbs, particularly when the market turns bearish. Impermanent loss is the Achilles' heel for liquidity providers, and one of the first thing new LPs should learn about.
We asked our LP if they have any advice for LP rookies dipping their toes in the water, and to quote him verbatim “Beginner(s) should track their performance daily. I setup a specific time each day to pull my data. What I recommend to track is following: coins, pool amount, Uniswap pool fees, totals and daily ROI. This will tell the investor whether they make money or loose. LP is NOT risk free investment, but with right strategy risk can be mitigated”
In our interview, the LP describes their alert system that listens falls volatility in the market and informs them so they can adjust their position or close them. This provides a seamless segue into our upcoming section, where we'll guide you on automating your LP positions with Aperture.
Automating Uniswap V3 Pools with Aperture: Making DeFi Fun!
Uniswap liquidity provision is like a rollercoaster ride in the world of DeFi. It can get time consuming to constantly monitor your positions and try to optimize it yourself.
Enter Aperture Finance, the smart contract wrapper that's here to make your LP journey more hands off.
Join the Private Beta and get a head start
Getting started with Aperture is a breeze but first we would need to apply to their platform. Simply fill out a Typeform, don't forget to let them know we referred you (by using our Eth Address).
This will give you a better chance of getting early access, and voilà, you're in!
Creating Your LP Positions with Style
Once you're in, creating LP positions is as easy as pie. The dashboard is user-friendly, and provides easy to use functions right there to make the most out of your position:
You can either throw more liquidity into the mix, pocket those hard-earned fees, or take the savvy route of reinvesting.
Auto-Compound: The Ultimate Lazy Hack 🦥
With Aperture, you can set your fees to auto-compound. What this essentially means is that you can set your compounding strategy on auto-pilot while specifying what the minimum and maximum fees we are willing to pay. These could be be an absolute dollar amount or a percentage of your position.
Rebalance Like a Pro 👨🏻🔬✖️
Rebalancing? No sweat. Adjust your range with a few clicks, and let Aperture do the heavy lifting. Say goodbye to tedious manual work and multiple steps to remove and then re-add liquidity.
Auto Rebalance: Smart and Savvy 📉
For the truly savvy LPs, there's Auto Rebalance. Choose your tokens, set your thresholds and your triggers based on price, ratio and time, and let Aperture rebalance for you.
Play It Safe with Auto-Close 🚪🙋🏻♂️
Feeling cautious? Use the same user-friendly interface to withdraw your liquidity with ease. Safety first!
Don't Miss the Aperture Airdrop 🛫
Here's the cherry on top: Aperture is doing a token airdrop in early 2024, and you could snag up to 66,666 Aperture Tokens! That's some serious dough. For a more in depth look into Aperture, check out our blog post where we did a deep dive.
Did someone order Sushi? 🍣
We're thrilled to announce that Poolfish has officially added support for SushiSwap, bringing our leading analytics to yet another top decentralized exchange!
Looking to discover new pools to dive into? Poolfish has your back there too. You can explore a variety of pools available on SushiSwap and get insights into Estimated Fees 24H – a handy feature that tells you how much you could make by depositing $1000, complete with a generic range based on price volatility.
Alright, let's get our Sushi on! 🍣 Flip your fins to SushiSwap in the Poolfish menu and let's go for a dip.
Now, similar to Uniswap, select your token pair and fee tier and let us run our predictive analysis on it. Let's peek at a classic - the WBTC/ETH 5 bps pool is Sushi's biggest by TVL.
Poolfish whips up its familiar simulation as we are used to for Uniswap.
We can spy on the biggest ballers providing liquidity to this pool too. We can also click on any of them to view more information on the SushiSwap website. Click the "apply" button to feed the stats to your simulator and watch it crunch the numbers.
Top Pools 💦 of the week
Each week we provide the top pools in each of our risk categories. If you’d like to view everything for your self, head on over to our pools page.
We strive to give our readers valuable information and nudge them in the right direction. We're all ears for suggestions on improving this lil' segment.
Without any further ado, here are our top picks!
RLB/ETH in the exotic pairs category for the ones feeling adventurous
ETH/RPL for the balanced swimmers
USDC/ETH in the 5bps category for the cautious paddlers
Thanks for reading! See you next week! 🐟
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