ETH-USDC - JIT Liquidity While Lending on AAVE

Strategy Objectives

1. Tick spacing: $ETH/$USDC is a volatile pair, so by keeping the tick ranges relatively narrow, the user can have more granular control.

2. Fee - Dynamic: Since $ETH/$USDC is a volatile pair, the fee charged will be dynamic based on the volatility of the pair with respect to the TWAP.

3. Auto-Exit: The position will automatically exit once the price of $ETH falls to 3900 USDC in which case all $USDC will be converted to $ETH. The response to this trigger is to convert all $ETH into $USDC and hold the position. In our case, the user wants to preserve their capital in USD.

4. Liquidity shape: The shape of liquidity is a single tick for JIT liquidity. As soon as the price comes into this range, LP will earn maximum yield and when it leaves the tick, the liquidity position will become idle.

5. Market shifting: LP chose JIT liquidity because of pair volatility to extract maximum yield from a narrow range in a single tick.

6. Use idle liquidity: Once the price leaves the set tick, the liquidity will become idle. To put it to use, $USDC will be lent on AAVE.

https://www.canva.com/design/DAGZdtmGapM/6oQ3KbnmJML333GJlhlgsQ/watch?utm_content=DAGZdtmGapM&utm_campaign=designshare&utm_medium=link2&utm_source=uniquelinks&utlId=h5220f52ada