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Step-by-step guide for liquidity providers

Opening Leveraged Liquidity Providing Position

In a normal user flow for opening leveraged yield farming position on Homora V2, user has to perform 4 simple steps including
  1. 1.
    Select a pool
  2. 2.
    Supply liquidity
  3. 3.
    Select leverage level
  4. 4.
    Confirm strategy
Recap on How to Open a Leveraged Yield Farming Position on normal pools here.
However, if users select a Uniswap V3 pool in step 1, users will encounter an additional step of selecting the price range before supplying liquidity.

Select price range

As shown in the UI below, users can select their preferred price range from 3 choices; wide, medium, or narrow range. Each price range is derived from a recommended price ratio. Users can also view parameters including a historical APR and an active asset price before making a decision.
Narrow price range
LP position is active only when the price moves within 1.3x from LP market price for volatile-stable pool or 1.0002x for stable-stable pool
Medium-wide price range
LP position is active only when the price moves within 1.5x from LP market price for volatile-stable pool or 1.0005x for stable-stable pool
Wide price range
LP position is active only when the price moves within 2x from LP market price for volatile-stable pool or 1.001x for stable-stable pool
See more details on How to Calculate an active price range from price ratio here.
Note: Price range cannot be changed after you open the position.For example, the selected price range for the above position is set at 843.59 - 3,393.42 DAI per ETH.
To recap, an LP position within a narrow price range earns higher trading fees when compared to an LP position within a wider price range given the same initial supply amount. Also, an LP position within a narrow price range is more prone to impermanent loss when the underlying asset price deviates. Therefore, we recommend users to select the width of price range based on their liquidity providing risk-appetite and preference.

Managing Leveraged Liquidity Providing Position

To manage open position(s), there are 4 availble actions that users can perform:
  1. 1.
    Add
    Add action allows users to supply more collateral to the existing position. This will result in a decrease in the debt ratio as collateral credit is increased.
Note: Users will be able to supply only one side asset without additional borrowing when the position is out of range.
  1. 1.
    Remove
    Remove action allows users to partially or fully withdraw the collateral from a position as well as pay back the debt.
    • If users withdraw the collateral (without paying back the debt), the debt ratio will be increased as collateral credit is decreased while borrow credit remains the same.
    • if users pay back the debt (without withdrawing the collateral), the debt ratio will be decreased as borrow credit is decreased while collateral credit remains the same.
  2. 2.
    Harvest
    Harvest action allows users to claim the yield farming reward.
  3. 3.
    Close
    Close action allows users to close an entire position. By clicking on close, Homora V2 automatically repays all the remaining debt and returns users the position liquidity