Avalanche Rush 3 Incentive & KyberSwap Elastic Liquidity

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avatar of @idiosyncratic1
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8 months ago - 2 minutes read

De-Fi projects started to initiate different types of services based on lowering the price impact and the impermanent loss for the investors. In the existing De-Fi systems, your $1000 is divided into 2 equal pieces, and the liquidity is provided for both sides. According to the change in the price of assets, your liquidity is re-adjusted in with an equal division.

kyberswap elastic liquidity avalanche.png

It is mostly fine to provide liquidity for your long-term coin bags and collect the trading fees if you believe that the coin is going to be more valuable. However, in the cases that the token loses a high percentage of its value from the moment you provided liquidity and the volume decreases drastically that makes it hard to get a satisfactory APR for your investment, then De-Fi may lose its attractive sides.

Remember Liquidity Books

โ€œInstead of having one pool with unbound price ranges, Liquidity Book has multiple separate bins with different prices that can be used as building blocks for a liquidity position.โ€ - Thedefiant

To find a solution for this issue, De-Fi projects designed incredible products that leveled up the utility of liquidity pools. For example, TraderJoe Liquidity Books are created to segregate liquidity bins for the best De-Fi experience for both liquidity providers and users. When your concentrated liquidity is out of the price levels that you set, your liquidity is excluded to preserve its X and Y coin balance.

Avalanche Rush 3 Brings Elastic Liquidity of Kyber

Considering the debut of Liquidity Books by TraderJoe and the Active Liquidity Time feature of KyberSwap on Avalanche, we may claim that Avalanche ecosystem cares about De-Fi and the concept of concentrated liquidity.

Essentially, the Rush campaign is created for such projects like CUB Finance to bring their platforms to Avalanche blockchain. We may take another step into DeFi on Avalanche with AvaCUB ๐Ÿฆ

Let's examine the details of Elastic/Active Liquidity:

image.png KyberSwap Farms Info

Similar to TraderJoe's concept, when your min level broken, your liquidity is put out of the system until the price enters your trading level area. In this system, you get something like liquidity stop-loss for your investment ๐Ÿ˜‰

New Target for CUB & Hive De-Fi projects

I think there are two things that we should see in this new trendy stuff. First thing is that Concentrated Liquidity is the future of De-Fi. It is the first step taken to make De-Fi global and user friendly rather than a "high risk but high return" investment option. Hive De-Fi developers may need to check and adopt it to our ecosystem โœŒ๐Ÿผ

For CUB De-Fi, it is a perfect time for AvaCUB to show up! Avalanche Rush is the campaign that is used to incentivise great projects to operate on Avalanche blockchain.

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