As part of our commitment to building the most advanced DeFi tools on Cardano, we want to give users an un-paralleled control over the risk held on their liquidity portfolios. Many complexities arise when managing your liquidity pool (LP) positions, and through our liquidity manager we will be making it easier for users to not only engage with liquidity farming, but also the power to build their own custom risk profiles that are automatically farming for them!
How is our liquidity going to be different?
As many are already aware, VYFI uses non-custodial LP farming. This means that LP tokens remain in users wallets while still farming. This gives us the opportunity to allow users to build portfolio structures with their LPs.
What is a portfolio structure (PS)?
In the context of investment, PS is the composition of a portfolio, with different PS’s containing their own unique risk/reward profiles, and more often than not, contain multiple assets.
How are we allowing users to built PS’s?
Through the introduction of multi-layered LPs, we are bringing 5 new types of Layered Liquidity Pools, each with their own risk profiles, and impermanent risk structures.
What are the advantage of these Layered LP Structures?
Users will be able to access unique risk profiles, while still owning and farming multiple tokens at once. As an example, a user could hold a single layer 3 LP that contains 3 liquidity pools inside of it, all of which are simultaneously farming, and in turn reducing the total risk held across each token by averaging the impermanent risk across all three tokens.
How will users build these customs LPs?
We are designing an easy to use liquidity manager, where users will be able to drop and drag assets they want from their wallets, and put their LPs together in a piecemeal fashion, similar to building Lego. By adding 1 token into the structure at a time, and our front end will show the user the risk profile of the structure that they have designed. If they want to then enter the structure, they will be able to automatically partake by just selecting approve!
How can users track their structures?
We are launching a portfolio page for LP structures on our site along-side the portfolio manager. We will also be providing users with an Impermanent risk calculator for each of the different LP types, so they can clearly understand how the risk is distributed for each given structure.
When can we expect the liquidity manager?
We expect the liquidity manager to be launched soon after our V3 DEx, with the target currently being end Q1, or early Q2.
Make sure to keep your eyes on our socials to ensure you don’t miss any news about when the liquidity manager is coming, and all the information about the new Portfolio Structures that will become available to users on Cardano! We can’t wait to bring the most advanced risk management system to the Cardano Blockchain — only made possible through VYFI’s state of the art V3 DEx, and completely unique design.
