An Introduction to Auto-Pool Vaults
Summer is sizzling at Struct Finance, and it’s not just the temperature that’s rising.
Within just 6 weeks, we not only launched three unique vault types but also crossed the $1.5 million Total Value Locked (TVL) milestone.
We opened our doors to three compelling products: USDC-USDC, BTCB-USDC, and, just two days ago, we unveiled our latest offering, the BTCB-BTCB vaults.
This isn’t just a number, it stands as a testament to the robust product-market fit of our vault offerings.
And this is only the beginning, as we have big plans for the future!
Our vision for Struct Finance goes beyond interest-rate products.
We are just gearing up to be able to source different types of yield sources and yield differentiation, and we are committed to continually aligning our products with groundbreaking innovations in the market.
Everything can be tranched! And we’re the ones that are going to do it.
- Liquidity Pools
- Foreign Exchange
- RWAs
- LSDs, LSDfi, LRTs
They all could be the next thing that we build on.
The core principle of tranching the risk of assets is in fact universal and applies to several asset classes. Our upcoming products and initiative will reflect this philosophy.
We are deeply committed to increasing risk management and risk transformation in DeFi, to craft investment products that resonate with different risk appetites.
Right now the curtain is falling for Trader Joe Auto-Pools, the latest innovation in Liquidity Provision!
High vs Low Volatility Vaults
Aside from differentiating the source of yields, Auto-Pools behave differently from our previous GLP vaults: while GLP vaults perform better in high-volatility environments, Autopools are better in low-volatility environments, as they have a higher APR if the price stays within a range.
If volatility is a symphony, our Genesis Vaults are designed for market Crescendos, while Auto-Pools perform better in a Lento.
Let’s have a practical example: while joining our BTC.B vaults would have been perfect when BTC price was rising, what can users do in times of reduced volatility?
As the chart below showcases, Bitcoin Implied Volatility Index is at its lowest historical level since two years ago.
With the market currently in a range, Auto-Pools are a more suitable choice for our users, compared to our GLP vaults.
Nonetheless, markets are unpredictable, sometimes they are volatile, and other times more stable. Our goal is to accommodate our users regardless of the market’s state of volatility.
There’s a Struct vault tailored for any market scenario:
- If you expect the price to range: deposit funds in an Auto-Pool
- If you expect volatility: join our GLP-based vaults.
Introducing Trader Joe Auto-Pools: A New Wave in Liquidity Provision
Providing liquidity can be nerve-wracking. It demands active monitoring, frequent position rebalancing, and often to battle the ever-looming ghost of impermanent loss.
Long story short, Auto-Pools streamline the entire process and automate it for you, allowing for the automated management of LPs.
LPs are a major improvement that lowers the barriers to entry for liquidity provision: by automating LP management they allow anyone, regardless of their knowledge, to provide liquidity.
As such, they are a positive development for the DeFi space, increasing the overall liquidity.
How do Auto-Pools work behind the curtains?
Upon depositing funds in an Auto-Pool, users are indirectly leveraging different liquidity strategies, executed by Autopools in the background.
The different strategies are each tailored for different market dynamics, offering users the necessary flexibility to navigate different market scenarios.
There are presently three primary “general” Auto-Pools on Trader Joe. These “general” pools are set to be a balanced approach, adopting a “general strategy to maximize fees with wide liquidity distribution”.
However, it’s also crucial to acknowledge the risks of Auto-Pools.
Depositing into an Auto-Pool exposes users to the price movements of the token pair selected, potentially altering their exposure. Additionally, increased volatility may also lead to increased impermanent loss.
Struct Vaults on Auto-Pools: Leveraged Concentrated Liquidity
Auto-Pools are the latest addition to our suite of products, following our GLP-based vaults.
The inclusion of Auto-Pools as an underlying asset to Struct Finance contributes to:
- Diversifying Yield Sources
- Allowing users to take advantage of different market scenarios
The increasing intricacy of the DeFi landscape is reflected in users becoming more sophisticated and exploring more complex yield strategies.
Auto-Pools, with their simplified liquidity provision mechanism, cater to this sophisticated audience, offering a distinct source of yield, apart from GLP.
We are initially targeting the release of the first AVAX-USDC vaults, and two more vaults based on Auto-Pools that are currently being tested by Trader Joe:
• BTC.b-AVAX Vault
• WETH.e-AVAX Vault
Our role as a protocol is to be able to offer as many solutions as technically feasible, by leveraging a multitude of underlying assets. This not only helps us offer different strategies for users but also enhances our protocol’s value through an expanding network effect.
Struct Finance Auto-Pool vaults offer a lucrative proposition to Trader Joe LPs seeking leveraged returns on their LP positions. Particularly risk-prone LPs could join the variable tranche of our vaults and benefit from a 2x leverage.
Finding the Perfect Balancer: Can you guess What’s Next?
Make sure to follow our channels, as we are anticipating finalizing the Security Audit of our Auto-Pools vault to be completed and ready to launch!
Our product roadmap is focused on diversifying our offerings and ensuring that our users will always find strategies fitting their risk profiles and the current market conditions.
Together with powerhouses like GMX and Trader Joe, we’re innovating for our users and the wider ecosystem.
As we round off the chapter on Auto-Pools, rest assured, we’re not stopping here. We’re already cooking up our next big integration — to boost DeFi even further.
Stay tuned and fasten your seat belts — we’re just warming up!
