Boost is a campaign hosted by Trader Joe that will see AVAX incentives distributed across liquidity pools over the course of the next ~four months. This initiative aims to bring back the excitement of the ‘2021 DeFi farms era’ that ignited the initial DeFi Avalanche ecosystem at a pivotal moment when new DeFi protocols are set to launch. As the central onchain marketplace for Avalanche, Trader Joe stands tall, serving the ecosystem and its participants as the leading token hub and main venue for the users on the Avalanche blockchain. Grab a can of Boost and get ready for the resurgence of DeFi on Avalanche.
Liquidity in DeFi is vital for a prosperous ecosystem. Boost is a program built to target and level up the entire ecosystem by strengthening core liquidity venues across a number of participating platforms. By uniting and collaborating under the Boost campaign banner, the Avalanche native builders both new and existing, can set a stronger foundation for the future of DeFi on Avalanche.
Boost rewards are AVAX incentives and to earn your share of incentives, all you need to do is deposit liquidity in participating markets on the Trader Joe platform.
<aside> 🆘 If you need technical support or further assistance please join our Discord and open a support ticket.
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<aside> ⚠️ Please be aware that scammers will try and trick you into clicking links and connecting your wallet, never trust anyone who directly messages you.
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BOOST rewards will be distributed over an approximate period of four months, with numerous pools available at any one time. There will be plenty of opportunity for participants to earn AVAX rewards and discover the best of Trader Joe and the supporting partners involved.
During the Boost incentive period, markets and the allocated rewards will be reviewed every 2 weeks with potential adjustments made based on wider market dynamics. There may also be incentives that stop in some markets or markets that have additional incentives added.
<aside> ▶️ The table to the right will be updated frequently ensuring you have access to the latest markets and the rewards allocated to those markets.
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Below are key markets with allocated BOOST rewards. Phase 1 will last for 4 weeks. Changes to incentives may occur within each phase.
<aside> ▶️ First answer this question: Are you confident at managing concentrated liquidity?
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<aside> <img src="https://prod-files-secure.s3.us-west-2.amazonaws.com/7e92f391-f8ec-49cf-883f-897754a95660/95f0d451-aed1-4db0-9634-68052fdea50d/boosticon.png" alt="https://prod-files-secure.s3.us-west-2.amazonaws.com/7e92f391-f8ec-49cf-883f-897754a95660/95f0d451-aed1-4db0-9634-68052fdea50d/boosticon.png" width="40px" /> Boost Pools will have a green logo with a gold AVAX branded can next to them
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TLDR: Concentrated Liquidity requires management
When you provide liquidity, you are concentrating your tokens over a fixed price range that you set. However, the price of a token is never fixed. Tokens move up and down as traders buy and sell them. The prices in a liquidity pool are determined by market buyers and sellers. As this happens, the active bin (which represents the token price) will move up and down, exchanging liquidity in the bin as it moves.
As a liquidity provider, you earn a share of fees from this trading activity because your liquidity is being used for swaps. Therefore, your goal as a concentrated liquidity provider is to deploy your liquidity within the range where the trading activity is occurring.
If the price of a token moves out of your range, you might need to withdraw and rebalance your liquidity. The video below shows this movement in action.
Price Movement in a Liquidity Book Pool ⬇️
<aside> 🔗 Basic Introduction: Primer to Liquidity Book
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<aside> 🔗 Risks: Inform yourselves of risks when providing liquidity
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TLDR: Instead of deploying evenly distributed ranges you can deploy your liquidity with bespoke shapes helping you to position with more conviction
The Liquidity Book Protocol is the only concentrated liquidity protocol that lets you instantly deploy customised shapes. Customising how you deploy liquidity, helps you to tailor your strategy to align with your own convictions. There is no right or wrong liquidity shape – each one will perform the best depending on your own management of your position and also market conditions. High level overview of shapes:
1️⃣ Spot: Very popular shape and aligned to other popular CLMMs
2️⃣ Curve: Helps you concentrate risk for lower volatility shapes
3️⃣ Bid-Ask: Suited for entering/exiting a token (single side)
Liquidity Shapes In Action ⬇️
<aside> 🔗 Basic Introduction: What a Shapes?
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<aside> 🔗 Basic Shapes: Understand The Basic Strategies
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<aside> 🔗 Single Sided Tutorial: Deploy a Single Side of Liquidity
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TLDR: Keep your liquidity inside the reward range to earn rewards
Concentrated Incentives gives you the traditional V1-era yield farming but built onto Liquidity Book. Earn rewards instantly with your liquidity that is positioned in the active bin. In concept, it works the same as how you earn fees, your liquidity must be within range.
The % of your liquidity relative to all other liquidity providers will determine your proportional % share of rewards distributed to you via the reward range. In the video below, you can see the reward range in action. It is anchored to the active bin and will move, in sync, with the price of the assets in the liquidity pool.
You earn rewards in real time, you can collect them anytime you want.
Concentrated Incentives Reward Range ⬇️
<aside> 🔗 Concentrated Incentives: Full guide to help you understand the specifics
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<aside> 🔗 Rebalancing Your Position: Keep in the money by managing your position
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The main aim for any Liquidity Provider is to earn fees captured by the trading activity that occurs in a Liquidity Pool. To earn fees using Liquidity Book, your liquidity must be within range.
If your liquidity is in range, you will see the 'active bin' which is visualised on the UI as being split by two colours, see the image below for further clarity on how the 'active bin' will appear on the UI.
When the price of the assets in the liquidity pool moves, this may cause your liquidity position to become 'out of position'. Your liquidity is always fixed when you deposit it into a Liquidity Book Pool. When your Liquidity is 'out of position' this means that the price of the underlying assets in the Liquidity Pool, have moved outside of your chosen range.
In the example above, you can see that the position is all green, indicating that the price of GMX has moved outside of the range. The UI will indicate when this happens to your own position. You will either see your Liquidity all green or purple, depending on the price change. You will be shown an 'out of position' signal.
If your position is ‘Out of Position’ you are no longer earning fees OR rewards.
You have some decisions to make:
Considerations and Risk
Each of these decisions carries trade-offs and risks, and the best course of action will depend on your own assessment of the market, your risk tolerance, and your goals as a liquidity provider. You must consider factors like market trends, the cost of gas fees, the potential for impermanent loss, and their desire for passive vs. active management when deciding how to manage your liquidity position.
<aside> 🔗 What does ‘Out of Position’ Meain? Rebalancing Your Position
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<aside> 🆘 If you need technical support or further assistance please join our Discord and open a support ticket.
</aside>
<aside> ⚠️ Please be aware that scammers will try and trick you into clicking links and connecting your wallet, never trust anyone who directly messages you.
</aside>
