Stella
  • Overview
    • 🌠Getting Started
    • 🀝Pay-As-You-Earn (PAYE) Model
  • Protocol Mechanism
    • ❓How Stella Works?
    • πŸš€Stella Strategy
      • Why Stella Strategy is Unique?
      • Strategy Type
      • Asset Type
      • Strategy Exposure
      • Collateral Factor
      • Borrow Factor
      • Credits
      • Price Range & Liquidity Shape
      • Liquidation
        • Liquidation Discount
        • Post-Liquidation Value
        • Pendle/Penpie Liquidation Price
      • Price Impact
      • Leverage
      • Supported Strategies
    • 🏦Stella Lend
      • Why Stella Lend is Unique?
      • Pool Type
      • Supported Assets
      • Yield Vault
      • Withdrawal Delay
    • πŸ’°Yield Calculation
      • PAYE Graph
      • Yield Sharing
    • ⚠️Risk Framework
      • Precautionary Measures
      • Slow Mode
  • App Guide
    • Walkthrough Stella APP
    • Open a position
    • Close a Position
    • View Your Position
    • Add/Remove Extra Collateral
    • Claim Assets from Liquidated Position
    • Deposit & Withdraw Assets
  • Developers
    • πŸ“ƒContract Addresses
      • Core
      • Stella Strategy
      • Stella Lend
      • Oracle
    • πŸ“œContract ABI
    • βš™οΈAPI
  • Tokenomics
    • 🎯ALPHA Token
    • ⚑Staking & Protocol Fees
    • πŸ‘₯Token Distribution
  • Additional Information
    • 🟠About Stella
    • πŸ”ŽAudit Reports
    • πŸ“£Community Links
    • πŸ“ΈMedia Kit
    • ❔FAQ
    • πŸ“–Terms of Use
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  • Price Range
  • Liquidity Shape
  1. Protocol Mechanism
  2. Stella Strategy

Price Range & Liquidity Shape

Price Range

Uniswap V3 pioneered the concept of "concentrated liquidity" where users can specify a price range they want to provide liquidity to. This means instead of all user LP positions receiving a share of trading fee every time an AMM swap occurs regardless of asset price, the LP position will be active and earn trading fee only when the asset price is in a selected price range. Trader Joe V2 has also implemented this concept.

In the integration with Uniswap V3 and Trader Joe V2, Stella Strategy simplifies the process of providing liquidity by creating 3 different instant price ranges: Wide, Medium and Narrow. Each price range has different minimum and maximum asset price resulting in different risk and return within the same strategy. The more narrow range will be more likely to earn higher trading fees but can potentially experience more β€˜Impermanent loss’ when an asset price moves.

Liquidity Shape

Trader Joe's Liquidity Book offers users opportunities to provide liquidity with higher levels of flexibility and customization. Users will be able to deploy liquidity in a shape that fit their strategic goals to the capital efficiency. Stella users can provide liquidity in either Spot or Curve shape. Each shape serves different purpose for different market condition and has different risk level.

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Last updated 1 year ago

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