Vault Parameters
The vault parameters calculate the Liquidity Positions chosen by the vault. It must be adjusted on-chain.
These parameters allow liquidity to be managed with 1 click.
General Information
A liquidity manager with a higher risk appetite usually want to concentrate more liquidity to get better performance*, but this will be at the expense of higher Capital Loss and poor liquidity if tokens trades out of range.
*performance relates to the increase in Fees Income and Capital Efficiency
Liquidity Managers should be aware of these trade-offs when changing the Vault Parameters.
Setting Vault Parameters
when editing a vault, the following approach can be used to set the vault's Strategy Parameters:
Overview
The table below summarises all the vault's parameters:
Vault Name
Name of the ERC20 token representing the vault shares.
NA
Vault Symbol
The letters representing 1 unit of the vault's shares
NA
Pool Address
Address of the Uniswap V3 pool managed by the vault
NA
Vault Manager
The wallet address that can change the vault's parameters
setManager()
Max Capacity
The maximum number of vault shares that can be minted
setMaxTotalSupply
Full Range liquidity %
The maximum % of total liquidity deposited into full-range
setFullRangeWeight()
Base-Order Width
The width of the range order used to collect fees and increase capital efficiency
setBaseThreshold()
Limit-Order Width
The width of the range order used to minimise Capital Loss
setLimitThreshold()
Rebalance Period
The minimum time that must elapse before the vault can chose a new position.
setPeriod()
TWAP Duration
The time period over which the average price within a pool is calculated
setTwapDuration()
TWAP Deviation
The vault will not chose a new position if the spot price differs from the average price by more than the TWAP Deviation.
setMaxTwapDeviation()
Minimum Tick Movement
The vault will not chose a new position at rebalance if the price moved by less than the Minimum Tick Movement
setMinTickMove()
Information Parameters
Information parameters contains the on-chain records that uniquely identifies a vault. They do not affect how liquidity is being managed. The parameters are:
Governance Parameters
Governance parameters contain the on-chain records that identifies the vault manager, the fees charged by the vault manager, and who can rebalance the vault. The parameters are:
Strategy Parameters
The Strategy Parameters concentrates liquidity, protect against Capital Loss, and ensure tokens are tradable in all market conditions.
When Rebalancing takes place, the vault will chose new positions by withdrawing all its liquidity from the Uniswap pool, and re-deposit it according to the ranges chosen by the Strategy Parameters.
The Strategy Parameters are set once, and the vault will automatically pick a new range each time rebalancing takes place. Everything happens on-chain, providing full transparency on how liquidity is being managed.
The Strategy Parameters use mean reversion to concentrate liquidity, and is one of the safest and most widely used mechanism to manage liquidity.
The parameters are:
If the vault is a project's main source of liquidity, always allocate some liquidity to full range to guarantee price discovery.
Security Parameters
The vaults created using Alpha Vaults are very secure, with no security incidences since launching in May 2021.
One of the key security component is the TWAP check, which prevents price manipulation, MEV extraction, and front running during Rebalancing. It uses the following parameters:
Gas Optimization Parameters
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