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Auto Pools: Automated Liquidity built on Liquidity Book
Farms are out, Auto-Pools are in.
Welcome to a new era of Liquidity Book. Auto-Pools are here, the next-gen automated liquidity solution built on top of Liquidity Book. Auto-Pools give you access to a simple and accessible one-click liquidity provisioning experience. Trader Joe is here to make DeFi easy, by pioneering innovation at the frontier of DeFi.
Auto-Pools will democratise the ability to access Liquidity Book, by abstracting away the complexities of managing active positions. Simple, one-click yield farming is here.
Liquidity Book gives you full control over the pricing of assets, but with the expectation that you manage positions to earn yield. Whilst this greatly enhances capital efficiency and opens up higher yield potential, this endeavor is complex, risky and requires careful management to execute with success. Trader Joe now introduces Auto-Pools that will automate the balancing of liquidity.
Platform link: https://traderjoexyz.com/
How do they work?
Users deposit Liquidity into an Auto-Pool. The Auto-Pool will then automatically execute the process of rebalancing those assets within a Liquidity Book pool. When the user withdraws from the Auto-Pool, they receive back their proportionate share of the current asset composition, with any fees accrued. It is important to highlight that orders to withdraw are collected and then executed when the Auto-Pool rebalances, which is approximately every 30 minutes.
What Auto-Pools are available?
‘The General’ Auto-Pool will be available on launch for the following Pools:
More coming soon
Meet: The General
The General is the first Auto-Pool that will be deployed for AVAX - USDC (Avalanche) and ETH - USDC (Arbitrum). The General automatically rebalances liquidity positions to maximize fee capture while balancing inventory. The General responds to market trends and asset imbalances, enabling it to adapt to most markets and environments. The General may be used for other Liquidity Book Pools.
Summarising The General:
Will there be more Auto-Pools available?
More Auto-Pools will launch in the coming weeks to increase the range of options available for users. Expect the next available Auto-Pool to be built for Stable pools titled ‘The Seeker’.
With current popular solutions in the field of automated liquidity management, strategies are typically executed via a smart contract. Auto-Pools have been built differently and are instead executed by ‘The Black Box’ which is an off-chain hosted command centre. This allows for Auto-Pools to be dynamically updated and iterated on over time to optimise the balancing process and improve performance.
Auto-Pools: Built for DeFi
When a user deposits assets into an Auto-Pool, they will receive back an Auto-Pool token receipt that is an ERC-20 standard. Auto-Pool token receipts are therefore fungible and very composable, opening up the possibility of collateralization, integrating self-paying loans, boosting yield with farms or even with leveraged yield farming protocols, or even combine strategies with options for hedging and stable returns.
Rewards and Fees
Auto-Pools will accrue their share of trading fees collected by Liquidity Pools
Auto-Pool tokens can be deposited into yield farms (future release)
Auto-Pools can be incentivized by partner tokens (future release)
Automation fee applied on each rebalance and equivalent to an APR of 4.5%
Automation fee is used for operational costs, such as gas fees on rebalances
There are no other fees or hidden fees
What exactly is the Automation Fee?
A pro-rated fee is taken on each rebalance performed by the Auto-Pool. The automation fee is an equivalent of 4.5% annualized over a year. The Automation Fee may at some point in the future be distributed to sJOE Stakers. The Automation Fee may also increase or decrease in the future.
⚠️ Risk & Disclaimers
Despite the inherent liquidity and contract risks associated with delegating liquidity from the Auto-Pool to the execution vehicle, automated rebalancing will be limited to eg hourly or daily. To further minimize risks, Auto-Pools may have further restrictions applied to them on the actions that can be taken for liquidity management. This would also allow for easy integration of 3rd party operators onto the platform.
It is important to highlight that Auto-Pools is not a product that offers ‘staking’ and that Auto-Pools do come with risk. Auto-Pools are not ‘Impermanent Loss’ proof and they are not an ‘investment vehicle’. Auto-Pools carry token price risk, just like any form of providing liquidity.
Community: The Pool Party
To promote the launch of Auto-Pools, Trader Joe is hosting an on-chain event called The Pool Party.
Deposit at least $100 into any Auto-Pool within 24 hours of launch to be captured in the first snapshot. A further snapshot will happen in the following one to three week period. All users who are captured in both snapshots, will be given 1 entry into the raffle draw for the Pool Party NFT Mint that will be hosted on Joepegs. With rewards ranging for $JOE tokens, honorary NFTs, and plenty of community perks, you definitely don’t want to miss this party!
Auto Pools are set to revolutionize the DeFi liquidity provisioning landscape, access the power of Liquidity Book with a simple one-click yield farming experience. Join Trader Joe today as he continues to innovate at the frontier of DeFi. Your new home in DeFi is ready and waiting.
About Trader Joe
Trader Joe is a leading multi-chain decentralized exchange and the inventor of Liquidity Book, the most capital efficient AMM in DeFi. Trade your favorite tokens, access one-click yield farming and shop for the latest digital collectibles at the Joepegs NFT Marketplace. DeFi has never been easier thanks to Trader Joe.