Uniswaption.com a hackathon project
Optimize liquidity provisions to match risk appetite
2 min read
Today in DeFI finding a token-pair and price range that meets a liquidity provider's (LPs) risk appetite is difficult. LPs have different risk appetites. Liquidity pools have differing yield distributions. Price ranges have different probabilities of hitting a price ceiling or floor. All of these may cause an impaired loss. The Uniswaption.com app was created in under ten days for the Unicode Hackathon. The goal of the app is to help LPs identify capital efficient liquidity pools and price ranges on UniswapV3.
HOW IT WORKS
Uniswaption.com lets LPs easily compare pools and find liquidity provision opportunities that match their risk appetite in three easy steps:
1 - Select Token Pairs: Historical prices are retrieved from Covalent API and fitted using chance-data distributions
2- Calculate Liquidity Percentage: Query tick liquidities and calculate range liquidity as percentage of total
3 - Interactively Evaluate: Visualize pools based on user’s risk appetite
Immediate Technology Improvements Using decentralized storage to store historical risk distributions. This will let anybody that has access to the data to easily compare pools and find liquidity provision opportunities that match their risk appetite. It also acts as a step towards proof of analysis of risk distributions and disclosure.
Give user the ability to fetch more currencies. Closely related to storing the chance-data so it may be reused is adding more currency pairs to the app. Once a risk distribution is created any other app user may use it.
Improve on the idea: Once the analysis is done the app aims to facilitate the trade and follow the performance. It is also envisioned to create more views of the data that dynamic aggregate a portfolio of positions.
The project won a sponsor award from Visor Finance!
To learn more or follow the project's progress follow @moatazelmasry93 on Twitter.