Jumbo Crab: Better Pricing and Lower Slippage on Large Deposits / Withdrawals 🦀

Tl;dr

• Crab is one of DeFi’s highest returning USDC strategies (+10.09% in just 4 ½ months!)
• Jumbo Crab aims to givelarge deposits and withdraws lower price impact (yay better pricing!). Currently, for a 200 ETH deposit on Uniswap slippage can be 6%+ compared to the average slippage via Crab Auctions of ~.79%
• Large deposits match with large withdraws or are queued for the Tuesday auction at 16:30 UTC

Jumbo Crab = Bigger Crab Deposits / Withdrawals

Jumbo Crab Overview

Opyn’s Crab Strategy is one of DeFi’s highest returning USDC strategies. From Jul 28, 2022 to Dec 11, 2022 the strategy has returned 10.09% (in just 4 ½ months!).

Lots of people like the Crab: small crabs, big crabs, medium-sized crabs, chad crabs, baby crabs, and JUMBO crabs. Everybody who likes USD returns like the Crab. But right now the Crab strategy isn’t very inclusive towards Jumbo crabs (sometimes referred to as plus-size crabs due to the weight of their deposits / withdrawals).

Jumbo Crabs trade in SIZE, which is expensive due to price impact and slippage. Currently, if a Jumbo Crab wants to deposit 200 ETH, the price impact on the trade on uniswap is ~6%. Jumbo Crabs HATE slippage because it prohibits large deposits. The strategy needs to be more inclusive!

Introducing “Jumbo Crab,” a mechanism that makes moving in / out of Crab in SIZE much cheaper with less price impact.

Jumbo Crab allows users to receive lower price impact by matching large deposits with large withdrawals or conducting an auction on Tuesday at 16:30 UTC.

Jumbo Crab allows users to receive lower price impact by matching large deposits with large withdrawals or conducting an auction on Tuesday at 16:30 UTC.

Jumbo Crab Example:

• On Sunday User A deposits $300k USDC
• On Monday User B withdraws $470k USDC
• On Monday $300k is offset match between User A and User B (prior to the Jumbo Crab Auction on Tuesday)
• On Tuesday at 16:30 UTC the additional 170k from User B is sent to the Jumbo Crab Auction

Both users receive better pricing (less price impact) than instant Crab deposits / withdrawals that trade on Uniswap.

The average price impact on trades in the regularly scheduled crab auctions (MWF @ 16:30 UTC) is currently ~0.7%. MUCH more inclusive for Jumbo Crabs!!

For more information about crab auctions, see this medium article.

What does Jumbo Crab look like?

• Instant Deposits / Withdrawals: User deposits / withdrawals that will execute immediately and trade via Uniswap
• Standard Deposits / Withdrawals: User deposits / withdrawals that will match approximately three times a week or trade via the Jumbo Crab auction on Tuesday at 16:30 UTC. Standard deposits / withdrawals are not instant and may result in a different realized PnL than the estimate shown at the time of queuing.

If the price impact for Instant Deposits is > 1%, the deposit method will automatically switch to Standard Deposit.

Instant Deposits / Withdrawals: User deposits / withdrawals that will execute immediately and trade via Uniswap

Standard Deposits / Withdrawals: User deposits / withdrawals that will match approximately three times a week or trade via the Jumbo Crab auction on Tuesday at 16:30 UTC. Standard deposits / withdrawals are not instant and may result in a different realized PnL than the estimate shown at the time of queuing.

Users can still toggle back to Instant Deposit to see the estimated price impact for trades that will execute immediately via Uniswap.

Risks

Jumbo Crab has been audited by Sherlock, and has been peer reviewed. Additionally, Opyn has partnered with Sherlock’s to provide $5M smart contract coverage and a $500k ImmuneFi bug bounty. We encourage extreme caution when interacting with all smart contracts, including Squeeth. Only use funds you can afford to lose. See the Opyn Terms of Service for a full list of risks and waivers associated with smart contract risks.