Uniswap V3 and IL Protection
Lets say in 28 days the price of $FOLD goes from the current price, $2.57 to $6.00 (a ~130% increase). How would that effect a $1,000 LP Position, assuming ETH price stays the same and we have an LP yield (re: fees from trading) of ~12% ($177.34)?
| Impermanent Loss | -\$ 758.91 | -26.76 \% |
|---|---|---|
| PnL (28d) | -\$ 581.57 | -20.51 \% |
We will allocate up to 10,000 $FOLD for up to 3 Months. The amount will match the yield from LP fees for positions up to $25,000. This Protection scheme is only available for those whom stake within the first 14 days.
We will use the suggested rate for determine the amount to distribute. You can open any range for Liquidity, however the suggested rate is what we will use for calculating the IL protection mitigation amount.
Determing the suggested rate
Concentrated Liquidity Multiplier target is = 3.0x
We establish a range that equals -63% MIN ~ 63% MAX
Note the Uniswap Frontend gives us 64.93%, that is fine
link to creating a position: https://app.uniswap.org/positions/create/v3?currencyA=0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2¤cyB=0xd084944d3c05cd115c09d072b9f44ba3e0e45921
Community Call 01/09/25
We will go over the IL mitigation mechanism on the call this Thursday. If you have questions or need assistance, please reach out over Telegram or on the Forums (preferred).
Example:
ETH PER FOLD
MIN PRICE=0.00047080941338369943
MAX PRICE=0.0017410179238600961