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Smart Pools

Overview​

Smart Pools, powered by Steer Protocol, represent a groundbreaking advancement in decentralized finance (DeFi) liquidity management. By leveraging Steer's core infrastructure and off-chain capabilities, Smart Pools are an automated concentrated liquidity manager that offers a balanced approach to multi-position liquidity.

Currently Smart Pools are used across 27+ chains, 32 DEX's including Quickswap, Camelot, Sushiswap and more and supporting over 800+ unique tokens with 2000+ market.

Key Benefits​

Smart Pools offer several significant advantages:

  • Improved liquidity depth
  • Increased capital efficiency
  • Reduced slippage
  • Higher fee returns
  • Secured execution via differnt decenterlised compute
  • Offering largest suite of market making strategies all all token pairs.
  • Multi-position liquidity provisioning

How It Works​

Steer's liquidity management solution enables pools to automatically manage liquidity using multiple positions. This approach leads to increased capital efficiency and potentially higher trading volume, benefiting all stakeholders in the ecosystem:

  • Traders can execute trades with lower slippage
  • Liquidity providers can earn higher returns
  • Platform operators benefit from increased trading volume and fees

Revolutionary Features​

Steer's concentrated liquidity manager is revolutionizing the current market in several ways:

  1. Open Platform: Steer's platform is completely open and permissionless. Anyone can build their own yield-generating apps and deploy them on any pools, fostering innovation and providing numerous ways for protocols and LPs to deploy their liquidity.

  2. Multi-Position Management: Steer's off-chain data processing capabilities allow management of up to 20+ positions within a single strategy, achieving impressive liquidity placement.

  3. Flexibility in App Selection: As an open platform, protocols have complete freedom to choose any available apps on the Steer App Store or build their own.

  4. Reduced Gas Prices: By utilizing off-chain capabilities for rebalancing requirements, Steer's liquidity manager significantly reduces gas prices.

  5. Backtesting Toolkit: Users can simulate strategies on on-chain data, providing insights into potential outcomes of trading strategies and enabling more informed decision-making.

  6. Fee Structure: Steer Protocol charges no upfront or management fee. Instead, a 15% performance fee is collected on fees made, distributed equally among all stakeholders (Strategist, Steer Protocol, Steer Nodes).

  7. Developer-Friendly: The platform supports 20+ languages and up to 10 data feeds, giving developers maximum flexibility to build and monetize their apps.

  8. No-Code Option: Users can deploy existing strategies from the App Store using a no-code approach.

  9. Customizable Access: Protocols can make their pools open or closed using a whitelist feature, providing control over who can deposit funds.

  10. Non-Custodial: User funds are fully secured in non-custodial wallets, minimizing risk even in the event of an attack.

Understanding Concentrated Liquidity​

Concentrated liquidity is a key concept in Smart Pools:

  • It refers to liquidity allocated within a custom price range.
  • Traders benefit from deeper liquidity around the current price, where most trading volume occurs.
  • Liquidity Providers (LPs) earn more trading fees with their capital within this range.
  • Concentrated liquidity allows capital to be more efficient.

Providing liquidity to a price range can be thought of as leveraging a passive LP position:

  • LPs put up a fraction of the reserves used to calculate their proportion of fees.
  • Smaller chosen ranges lead to higher leverage and larger proportions of fees for LPs.
  • However, smaller ranges also increase potential losses when asset prices change relative to each other.
  • Frequent rebalancing of ranges can maximize fee earning opporutnites; but can incur costs from gas expenditure or trading fees if the strategy does so.

LPs have the flexibility to create multiple positions, each with its own price interval. This mechanism allows the market to determine an optimal distribution of liquidity, incentivizing rational LPs to concentrate their liquidity while ensuring it remains active.

In summary, Smart Pools represent a significant leap forward in DeFi liquidity management, offering improved efficiency, flexibility, and returns for all participants in the ecosystem.

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