Alpha Vaults
Alpha Vaults automatically manage liquidity on Uniswap V3 for you. It is the first first Uniswap V3 LP vault to launch, and also the simplest, most stable, and the highest returning LP vault of its kind.
It is the pioneer in range order strategies, and its success created a new industry for market makers on Uniswap V3.
Why are Alpha Vaults needed?
Managing your liquidity on Uniswap V3 can be tricky. For example if you deposit $1000 of ETH and $1000 of USDC and the price moves, your position will no longer be balanced in a 1:1 ratio. You'd have to rebalance it - i.e. remove the liquidity, swap one token for another and add the liquidity back.
Alpha Vaults does this all automatically for you, saving you time and gas fees! Moreover, quantitative research is active being conducted to improve the underlying strategy and ensure that Alpha Vaults can continue to outperform other vaults.
Key Features
Higher yields using the new concentrated liquidity feature in V3.
Automatically rebalances for you so that your inventory remains balanced. You don’t have to worry about managing your position — you can just leave your deposit in the vault.
Executes rebalance passively using range orders to avoid swap fees and price impact.
Automatically collects trading fees from the Uniswap pool for you.
Vault shares are represented as ERC-20 tokens so are composable and fungible.
Saves you a ton of gas. A tiny amount of gas fees only have to be paid when entering/exiting the vault.
What makes Alpha Vaults different from other liquidity managers?
Alpha Vaults is able to outperform other Uniswap V3 liquidity managers due to its strategy and execution. It only rebalances passively in order to avoid Uniswap's 0.3% swap fee and any potential price impact. This fee might sound small, but if it's rebalancing frequently, avoiding this fee can have a huge impact on LP performance.
More details can be found in How the strategy works.
How do I use Alpha Vaults?
Go to alpha.charm.fi, select a vault and deposit the two tokens. The deposit amounts will be in the same ratio as the current holdings of the vault - so they won't necessarily be in a 1:1 ratio.
How well does Alpha Vaults perform?
It's too early estimate what the long term APY or risk profile would look like, but the early signs are promising - it earns around a 300% APY from Uniswap V3 fees and easily outperforms an LP over the full range:
Backtest results over 11 months using Uniswap V2 data were also very promising.
What fees are charged?
5% of the fees from Uniswap go to the Charm treasury. These will partially be used to cover the gas costs of rebalancing. In the future, this protocol fee will be able to be modified by Charm token holders.
Is Alpha Vaults audited?
Yes. Charm was audited by Certik with no major findings. The audit report is available at https://www.certik.org/projects/charmfinance
In addition, Charm also has a bounty with Immunefi to ensure its code is constantly monitored by the security community. Further details are at https://immunefi.com/bounty/charm/
Where's the Github repo?
https://github.com/charmfinance/alpha-vaults-contracts/
Is there a bug bounty?