Concentrated Liquidity Vaults

Concentrated Liquidity Strategy Vaults are a hybrid strategy and auto-compounding vault built to assist in the management of Concentrated Liquidity Positions. This vault assigns a specific price range (displayed), automatically rebalances to reduce divergent loss, and auto-compounds trading fees and rewards.

Orca Whirlpools

Currently we are offering Concentrated Liquidity Strategy Vaults built on Orca Whirlpools. Orca whirlpool vaults offer higher capital efficiency by concentrating liquidity in a specific price range. Orca's concentrated liquidity Whirlpools has been double audited by Kudelski and Neodyme.

Risks

Smart Contract Risks

All of Tulip Protocol's code is novel and experimental. Please use discretion when depositing funds. While we have been peer reviewed by the Solana Foundation and other developers, we are not liable for funds lost due to smart contract exploits.

Counterparty Risk

Strategies will generally involve usage of other Solana DeFi platforms. This will add a layer of counterparty risk. The platforms that Tulip Strategies deploy towards will be reputable but users must use discretion when depositing funds.

Divergence Loss (Impermanent Loss)

As token prices diverge from their prices at deposit, your liquidity changes in value when compared to its value if tokens were held outside the pool. Depending on volatility, your liquidity stage may become lower than your deposit when you withdraw. Large price swings could cause liquidity providers to lose money. The risk of impermanent loss is amplified in Concentrated Liquidity Vaults.

Note: Divergence loss is always a comparison of value versus simple holding. Loss in value due to simple changes in asset values is not divergence loss.

Directional Risk

As the price of the underlying asset changes over time, you may be exposed to directional risk from open positions.

Price Volatility Risk

When there is significant volatility in the price of one or both assets in a position, the vault will rebalance more frequently. Each rebalance imposes a slight loss to position value, therefore multiple rebalances in short succession adds an increasing loss to the position value.

There are protection mechanisms in place that dynamically adjust the range the vaults provide liquidity to, as well as the amount that the price can drift before a rebalance is triggered.

Deposits

In standard AMM pools, LP tokens represent how much of the total liquidity of a pool is owned. As users deposit liquidity, their original tokens go into the pool and mint LP tokens in an equivalent amount, increasing both liquidity and total supply of LP tokens. As users withdraw liquidity, they burn their LP tokens and receive back the original tokens according to the balance of the pool. In Concentrated Liquidity pools, each liquidity provider decides the range and amount of liquidity deposited into the pool, making each LP token unique, and therefore non-fungible.

Rebalance

It is important to note that during vault rebalancing, withdrawals and deposits will be temporarily disabled. This is to ensure the safety of all users' funds. Withdrawals and deposits will resume once rebalancing is completed.

Performance Fees

Stable/Stable Pairs (ex USDC/USDT)= 5%

Psuedo-Stable Pairs (ex mSOL/SOL) = 5%

Non-Stable Pairs (ex SOL/USDC)= 10%