Flexible Parameters to Optimize Yield
LPs are encouraged to adjust the parameters available to optimize their rewards. The parameters are:
The Number of Trading Pairs
LPs have the option to deselect the trading pairs that they do not wish to provide liquidity for. For example, one can specify to not provide liquidity for the ETHUSDC pair within the USDC pool but provide liquidity to other trading pairs. The more trading pairs an LP provides liquidity for, the higher the utilization rate of his/her funds, leading to higher rewards.
Price Range (percentage within the range of reference price)
LPs have the option to manually select the price ranges to provide liquidity for, for each trading pair. The price range can vary from trading pair to trading pair, for example 10% for ETHUSDC and 5% for BTCUSDC. The narrower the price range, the higher the utilization rate, hence the higher the rewards. However, if a specific trading pair trades outside of the specified range, then the funds will not be utilized, hence no rewards will be earned from that trading pair. Rewards will continue to be earned from other trading pairs.
The liquidity provided will be deployed to the order books according to the parameters set. LPs can decide to retract their liquidity at any time.