- How is APR estimated for the year for a trading pair that is highly dependent on fluctuating volume? For example if volumes are high, and Flashstake pays out 20% immediately, but then volumes plummet in the following months, the Flashstake/users lose money?
The Flashstake docs “Where does the yield come from?” may help answer part of this.
Yield Pools and Liquidity Pools are used to pay the upfront amount. If volume plummet, this does not impact existing stakers, it only impacts how fast the yield pool will fill up to help facilitate future Flashstakes that “burn” instead of “swap” for upfront yield.
- Is the LP lockup much shorter than the 1 year lock up of the rETH example to take into account the volume volatility? 1 Month lockups?
The Liquidity Pools being incentivized with ARB tokens from this proposal (as we have done with FLASH tokens for incentivizing previous strategies at xToken) would be expected able to facilitate a decent amount of upfront yield, so I don’t anticipate there being any need to have a strategy maximum duration to be set lower than 3 months, with an ideal target of 6+ months as the maximum duration enabled.
- What are the locked up LP liquidity ranges, since univ2 are being locked up and put into univ3 they will be full ranged liquidity providing?
- If not full range, how are these positions actively managed to keep inrange? Is IL calculated in the expected APR?
The UniV3 LPs locked up as Flashstakes, not to be confused with xToken LP incentives for anyone else reading this, would likely not be a full range but would benefit from concentrated liquidity improvements even if set in a very wide range. We would evaluate each LP on a case by case basis. For example, ARB has been within a tight price range of around $1-$2 since it launched so a USDC/ARB pair could have a tighter range than some other LP whose both tokens have more volatile price changes such as let’s say GMX/WETH.