Uniswap V3 Range Position Analyzer
Analyze your Uniswap V3 ETH/USDC liquidity positions, calculate impermanent loss, and determine optimal recovery ranges based on real-time data.
Dynamic Range Positioning Strategy
Dynamic Range Positioning (DRP) is an innovative approach to liquidity management that continuously recalibrates position ranges based on price movements and profit/loss status.
Uptrend Strategy
- Start with a balanced position (e.g., symmetric range of -10%/+10%)
- When price increases beyond your upper range, position converts to stablecoin
- Create an asymmetric position with tight upper bound (+2%) and wider lower bound (-18%)
- This reduces capital at risk while allowing for continued upside capture
Downtrend Recovery
- Start with a balanced position (e.g., symmetric range of -10%/+10%)
- When price decreases below your lower range, position converts to volatile asset
- Calculate the price target needed to recover the loss
- Create a recovery position with upper bound at recovery price and lower bound close to current price
Benefits Over Traditional Strategies
- Enhanced Capital Efficiency
- Systematic Risk Management
- Impermanent Loss Mitigation
- Fee Optimization
- Automated Execution
- Adaptive to Market Conditions
BTB Finance is exploring the integration of Dynamic Range Positioning as a new vault strategy. This would allow users to deposit assets into a DRP vault and have positions automatically managed.
Understanding Uniswap V3 Positions
Concentrated Liquidity
Uniswap V3 allows liquidity providers to concentrate their capital within specific price ranges, potentially increasing capital efficiency by many multiples compared to Uniswap V2.
Impermanent Loss
Impermanent loss occurs when the price of your deposited assets changes compared to when you deposited them. In V3, this effect can be amplified due to concentrated liquidity but may be offset by higher fee earnings.
Recovery Strategies
When experiencing impermanent loss, you can create a recovery position with a specific price range that will help recapture losses when the price returns to a certain level.
Dynamic Range Positioning Strategy
BTB Finance is developing an innovative approach to liquidity management that adapts to market movements:
- Automatically recalibrates position ranges based on price movements
- Locks in profits in uptrends with asymmetric positioning
- Creates targeted recovery positions in downtrends
- Optimizes fee generation while reducing impermanent loss risk
Stay tuned for our upcoming Dynamic Range Positioning vault strategy!
Dynamic Range Liquidity Positioning
Uniswap V3's concentrated liquidity feature allows for more efficient capital usage but introduces complexity in managing impermanent loss. Our Dynamic Range Positioning strategy helps optimize your approach.
Key Concepts
- Concentrated Liquidity: Unlike previous AMM versions, Uniswap V3 allows you to provide liquidity within specific price ranges.
- Price Range Selection: Narrower ranges earn more fees when prices stay within range but risk going out of range.
- Impermanent Loss: The opportunity cost of providing liquidity compared to holding assets, which can be larger in V3 due to concentration.
- Dynamic Repositioning: Our strategy involves continually adjusting position ranges based on price movements and profit/loss status.
Recovery Strategy
When a position experiences impermanent loss and moves out of range, our calculator determines an optimal recovery range:
- Use current price as the lower bound
- Calculate a mathematically optimized upper bound that would recover losses if reached
- Concentrate liquidity in this recovery range to maximize fee generation if price returns to the target level
By repositioning your liquidity based on the recovery analysis provided by this calculator, you can potentially convert a position with impermanent loss into one that yields positive returns over time.