Smart Pools, launched on Sushi, are an Automated Liquidity Management (ALM) solution powered by Steer Protocol, designed to augment capital efficiency and yield for Liquidity Providers (LPs) while eliminating the need for active management, as the system automatically keeps the positions in range.
How do Smart Pools work?
These pools automatically rebalance the liquidity in response to market conditions to secure better returns, mitigate risks, and ensure efficient capital deployment, so users do not have to manually rebalance their own liquidity as the systems always keep you in range, all driven by yield-generating algorithmic strategies.
How to access Smart Pools on Sushi?
Users can access and interact with Smart Pools by clicking on the hyperlink here or navigating to the ‘Explore’ section on Sushi.com.
What does it mean by "Permissionless Pool Creation?"
It means that Smart Pools are available to all and that anyone can create one with ease. However only "Verified Strategists" show up on the Sushi UI.
How many pools and network are Smart Pools available now?
Smart Pools are currently available on 8 chains including Arbitrum, Polygon, Polygon zkEVM, Optimism, Base, Avalanche, ThunderCore and BNB Chain with over 50 pools available.
What benefits do Smart Pools offer compared to v2?
Compared to v2, Smart Pools elevate the rewards through auto-compounding of fees, amplified rewards, up to 8.5x return, superior fee structures, permissionless pool creation, enhanced liquidity concentration, and reduced slippage and impermanent loss for traders.
What are the unique features of Smart Pools?
🌟 : USPs which are hard to replicate elsewhere outside of Steer Protocol ✅ : Smart Pools only No checks: ALMs benefits in general
🌟✅ Superior fees compared to other ALMs. 🌟✅ Permissionless pool creation, users can create a smart pool in under 30s start to finish 🌟✅ Largest set of strategies people can use in regards to depth 🌟✅ Liquidity Sudio - SDK to build LP strategies 🌟✅ Open Source Backtesting - Allows users to test any strategy on any pair at any historical time period for a pool to know how strategies run in different conditions🌟✅ The only platform to allow for development of LP strategies AND to provide the fees generated to those developers
✅ Auto-compounding of fees combined with amplified rewards, elevating profits and minimizing risks for LPs, with up to 8.5x return compared to v2 ✅ Deeper liquidity with the same fund allocation.
Enhanced concentration of liquidity around the current price.
Reduced slippage and impermanent loss for traders.
What is the difference between Smart Pools and other ALM solutions?
The unique collaboration with Steer Protocol and Merkl, alongside advanced multi-position strategy infrastructure and off-chain computing, sets Smart Pools apart by offering a distinctive set of features and benefits to LPs.
What is the infrastructure of Smart Pools?
The infrastructure of Smart Pools leverages Steer Protocol's robust off-chain computing capabilities through its Off-chain App Engines, allowing efficient handling of complex computations off-chain while executing the resulting logic on-chain, thus optimizing the liquidity balancing process and enhancing performance.
How does the Smart Pool Yield Farm function?
Smart Pool Yield Farm provides additional rewards on top of fee yields. Once tokens are deposited into Smart Pools, users can deposit receipt tokens into the yield farm to accrue further rewards. This multi-position approach deepens liquidity and covers a wider price range, potentially minimizing slippage for traders.
What risks are associated with Smart Pools?
Risks include frequent rebalancing, impermanent loss if liquidity ranges are too narrow, and market condition changes affecting back-tested strategies. Off-chain pooling reduces on-chain transaction costs, but the inherent risks of market volatility and strategy effectiveness remain.
Are there any backtesting tools?
Strategies deployed by Steer Protocol have been back-tested for reliability and efficiency. For pools deployed by users, there’s a backtesting platform users can backtest their strategies. Link
When I see an "out of range" pool, should I still LP into it?
Usually, you would not want to LP into an out-of-range strategy. You would want to wait till it goes back in range. This happens when there are larger price movements, and the strategy is in a tight range.
How many strategies are there, and what is their difference?
There are five most common strategies on Smart Pools :
Channel Multiplier Pool
Moving Volatility Pool
Stable Pool
Elastic Expansion Pool
High Low Channel Pool
Here's a quick comparison:
Strategy
Tool Used
Potential for Higher Return
Range Narrowness
Channel Multiplier Pool
Multiplier for price channel
Medium (depends on channel width)
Moderate
Moving Volatility Pool
Keltner Channel (volatility indicator)
High (adapts to market volatility)
Wide
Stable Pool
Token's decimal precision and variance from peg
Lower (static positions)
Narrow
Elastic Expansion Pool
Bollinger Bands (flexible fund adjustment)
High (adjusts to market conditions)
Wide
High Low Channel Pool
Donchian Channel (measure of highs and lows)
Medium (depends on market volatility)
Moderate
You can see the details below as shown on the Smart Pools:
Channel Multiplier Pool This strategy uses a multiplier to make channel around the price. The wider the multiplier, the wider the area of coverage on the channel on both sides of the current price.
Moving Volatility Pool This strategy uses recent trading data to form a Keltner Channel that sets the range to place optimal liquidity for a given period of time. The Keltner Channel is a technical indicator that measures volatility using upper and lower bands, and an exponential moving average. These bands adjust based on market volatility and can help identify trends useful for providing liquidity. The Keltner Channel is a useful tool for LPs seeking to make informed decisions based on market volatility.
Stable Pool This strategy is set based on the token's decimal precision and the typical offset and variance from the ideal peg. These positions are static, meaning low gas fees and reduced price volatility.
Elastic Expansion Pool This strategy uses a technique called Bollinger bands to create a flexible pool of funds for liquidity provision. It automatically adjusts to changes in market conditions, such as price swings and fluctuations, to optimize the placement of funds, fees earned, and capital efficiency.
High Low Channel Pool The Donchian Channel is a technical indicator used to measure the highest high and lowest low over a specified period, and it creates an upper and lower band accordingly. The range multiplier is also used to adjust the bands based on market volatility.
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