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Zyberswap partners with Gamma for Active V3 Liquidity Managment
We are thrilled to announce that Zyberswap's V3 liquidity pools and farms will be supported by Gamma, a top active liquidity management protocol.
With this integration, Zyberswap LPs who hold liquidity positions in V3 pools and farms can leverage Gamma's cutting-edge technology to actively manage their liquidity, streamlining the entire process and making it more efficient.
This represents a crucial step towards driving greater adoption, ease of use, and utility for our V3 model.
By using Gamma's active liquidity management tools, users can benefit from automatic rebalancing of their liquidity to keep it within range, as well as auto-compounding of generated swap fees to maximize capital efficiency.
Once you deposit your liquidity, Gamma takes care of the rest. Managing your liquidity has never been easier!
As we continue our transition from V2 to V3, we will start moving emissions to Gamma pools in two stages. During the first stage, users will be able to use Gamma externally on their dApp's interface. In stage two, Gamma will be integrated into Zyberswap's front-end to create an even more intuitive and improved user experience.
What is Gamma?
Gamma is a non-custodial protocol that offers automated and active management of concentrated liquidity. Through various management functions, including rebalancing, position setting, and fee processing, Gamma allows for the active management of funds within liquidity pools without sacrificing asset custody. These features are made possible through ongoing research and implementation of key strategies driven by data science and financial modeling, aimed at delivering optimal results to customers.
Why is Active Liquidity Management needed for the Concentrated Liquidity?
ALMs are designed to address several challenges that exist in CL AMMs:
CL AMMs provide greater capital efficiency compared to standard AMMs, but they are also more complex to manage. Users must understand different liquidity ranges, associated risks, and deploy their capital with more steps. This complexity can be daunting for many users.
Higher Impermanent Loss
Another challenge with CL AMMs is the increased risk of impermanent loss due to the ability to concentrate liquidity. If the market price goes beyond the established price ranges, users face the maximum IL. Therefore, users must be mindful of their risk appetite and provide liquidity accordingly.
Active Position Management
To mitigate against impermanent loss, users must be active in managing their CL positions. This requires constant supervision to ensure that current prices do not go beyond the established ranges, or else they face the risk of maximum IL. This active management can be time-consuming and difficult for many users.
More work for Projects managing their own Liquidity
Additionally, projects looking to manage their own liquidity and engage in market-making activities will need to allocate more time and resources under a CL environment.
ALMs are focused on active management for CL AMMs to maximize fee generation, minimize impermanent loss, and automate the process of rebalancing users' positions.
With ALMs like Gamma, users can outsource the active management of their liquidity in a trustless manner. This means that users can avoid the complexities of active management and benefit from a more streamlined and efficient process
In CL, LP tokens are represented as an NFT, which hinders composability. However, with Gamma's ALM, LP positions will be manifested as ERC20 tokens, which are composable across DeFi. This means that LPs can deposit Gamma LP positions to Zyberswap's standard farms and benefit from the platform's other features.
We trust that you found the above content informative. We will be releasing more content on concentrated liquidity and active liquidity management, as well as guides on how to interact with Gamma. To stay up to date, please follow us on our social media channels.
Thank you for your support!