Canopy
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    • Application Layer
    • Rewards Layer
    • Strategy Layer
      • Single Sided Liquidity
      • Simple Lending Strategy
        • Echelon Simple Lend
        • MovePosition Lend
        • Layerbank Lend
      • Vault Rebalancing Strategies
        • Ascend Strategy
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      • Echelon Integration
      • MovePosition Integration
      • Layerbank Integration
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  1. Canopy's Four Layers
  2. Strategy Layer
  3. Vault Rebalancing Strategies

Ascend Strategy

The Ascend strategy is a liquidity management approach tailored for correlated and stable asset pairs. It focuses on centering liquidity around a defined peg and making gradual adjustments in response to market conditions. By deploying liquidity within a carefully calculated position radius, the strategy aims to optimize fee generation while minimizing risks through deliberate and controlled rebalancing.

Key Features of the Ascend Strategy:

  1. Centering Liquidity Around the Peg: The strategy calculates a position radius around the pool’s peg, which is set by the strategy administrator. This ensures that liquidity is deployed in the most efficient range, optimizing fee generation while aligning with the pool’s price dynamics.

  2. Dynamic Rebalancing: As the pool’s price shifts over time, the strategy dynamically adjusts by performing swaps and rebalances to reposition liquidity, ensuring it remains centered around the new price. This continuous rebalancing helps optimize returns and maintain an ideal liquidity profile.

  3. Median Observation for Stability: To avoid reacting to short-term volatility, the strategy takes multiple observations at regular intervals and calculates the median price. This median serves as an anchor point for rebalancing decisions, ensuring adjustments are deliberate and informed by broader trends rather than temporary price changes.

  4. Controlled Swaps for Efficiency: The strategy limits the size of swaps to ensure that only a controlled portion of the vault's liquidity can be swapped at once. Swaps occur within a single tick, incurring minimal slippage, and are designed to maintain the pool’s active price point.

  5. Periodic Adjustments for Stability: Rebalancing is triggered when the median peg has moved or when a swap can safely increase the concentration of tokens around the peg. This ensures that liquidity remains tightly aligned with the peg, maintaining optimal positioning and efficiency without unnecessary activity.

The Ascend strategy is designed to maintain liquidity centered around the pool's real-time price (tick) while adjusting dynamically to market changes.

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Last updated 2 days ago