Supercharging BABL/ETH liquidity

BABL, the governance token of Babylon is now listed and trading on Uniswap. Yesterday, we deployed an Uniswap V3 pool BABL-ETH with approximately $2M in TVL.

We are 🤝 partnering with Visor.finance to actively manage our liquidity and increase capital efficiency.

🦄 Uniswap V3

Before V3 was launched, teams needed to provide liquidity across the full price range of the AMM, reducing capital efficiency and causing higher price volatility and slippage for traders.

Uniswap V3 provides liquidity providers with the tools to concentrate liquidity across specific price ranges. In theory, liquidity providers can get higher returns on their capital to provide liquidity with 4000x capital efficiency compared to v2.

You can read all about Uniswap V3 here.

⚙️ Problems in Paradise

However, Uniswap V3 also introduces several challenges for liquidity providers:

• Active Maintenance. Uniswap V2 positions required no maintenance. On V3 you have to constantly monitor and adjust your positions to make sure you are concentrating liquidity across the relevant price range for your token.
• Out of range. If you create a position with a specific price range and the price moves outside of it, trading completely stops. You need to redeploy liquidity across a new price range to reenable trading.
• Positions are managed through NFTs (ERC-721). This introduces some technical complications for liquidity providers that are smart contracts (protocol treasuries) given that they need to be able to hold these NFTs.
• Fees are not compounded. Swap fees are not reinvested and need to be manually allocated to the position.

🔭 Visor to the rescue

Thankfully, Visor.finance and their Hypervisor product solves all the problems mentioned above.

Visor provides active liquidity management for Uniswap V3 positions. On top of it, Visor automatically reinvests Uniswap V3 fees weekly.

Hypervisor makes it really easy for you to adjust liquidity across different price ranges. They also abstract the NFTs and provide you with ERC-20 tokens that represent your liquidity position.

Finally, Visor.finance analyzes the pair price history to generate customized strategies for your pool that will optimize its liquidity and capital efficiency.

You can learn more about their strategies here.

Join us

If you want to acquire a piece of Babylon, you can trade our governance token (BABL) here.

If you haven’t had a chance to use Babylon yet, please join the waitlist to request access to our private Beta and help us build a better way for communities to invest in DeFi together.️

Join our Discord to stay up to date and discuss new ideas with the community.

Babylon is a community-led asset management protocol that enables users to create investment clubs (we call them gardens) and invest in DeFi together. It’s built on the Ethereum network and it’s non-custodial, transparent, permission-less, and governed by the community. BABL is the governance token behind it.