Try Quests to earn cryptoUniswap - Positions
Bounty 48 - Visualize the proportion of active positions on Uniswap V3 that have been out of range vs. in range daily since the launch of Uniswap v3.
As a Liquidity provider, one must take this into consideration as , your position is LESS LIKELY to be in range for a Volatile-Stable pair, which implies LESSER FEE GENERATION.
So one must plan the fee and ranges appropriately, esp in UniswapV3 as once the Price leaves range of a given Liquidity position, the entire position gets converted to the lower priced asset, which means you are loosing upside exposure when price moves higher and while downside movements leave you with a lesser valued asset.
An interesting pattern arises here.
Notice how Volatile - Volatile assets pair are more usually in range than Volatile - StableCoin pairs. This can be interpreted in three ways.
- Either LPs using the apparent 'Limit-Order'-esque nature of these range bound positions to exit or enter Liquidity positions
- LPs have lesser certainity in the ranges of these Volatile-Stable pairs, and hence are spread out consistently.
- LPs simply can't match the market volatility of these pairs.
In the above plot, I have grouped the top 10 pools into three categories :
- StableCoin - StableCoin PAIR - Blue
- Volatile Asset - StableCoin PAIR - Red
- Volatile Asset - Volatile Asset PAIR - Yellow
The Data for this short analysis was taken and modified from Flipside user Cryptonyv2's own dashboard
- With atleast 50 percentage of positions in range on average everyday, The LP bots are doing a good job in maintaining liquidity.
- Days of extreme volatility did reduce efficiency of these bots, however we can expect the bots to do better next time and achieve high average rates of in position