Concentrated liquidity pools on the planet | from planet

We’re excited to announce that Aggregated Fusion Pools are now available on Planet, offering our users a simplified way to achieve high yields. We have carefully selected the most lucrative fusion pool per LP pair rather than offering all options available on Thena to make it easier for our users to choose the right pool for them. Additionally, we’ve implemented one-click transformation of any asset into Fusion Pool receive tokens, abstracting all the complexity associated with using Fusion Pools and making depositing and earning rewards easier becomes.

In this article, we explain what fusion pools are, how they work, and why we chose the type of fusion pool to begin with. We also explain how you can deposit into Fusion pools and earn additional GAMMA rewards on Planet.

What are fusion pools?

Fusion pools are Thena’s concentrated pool of liquidity. They work on the same model as Uniswap V3 pools.

For those unfamiliar, concentrated liquidity pools allow users to predict (i.e., set) the price range in which they think swaps within the pool will occur. As long as the tokens remain within the user’s specified price range, they will earn transaction fees from the exchange. The tighter the user’s price prediction, the more the user earns. For example, if the price of BnB is currently 330 BUSD. If Dylan provided liquidity in a price range of 300 to 350 to the concentrated liquidity pool and Rachel provided liquidity in a price range of 325 to 335, Rachel would earn significantly more in transaction fees compared to Dylan.

So why shouldn’t everyone choose to keep the range extremely narrow? This is because the concentrated pool of liquidity would do two things if the price went outside of the specified range.

1. You would no longer be charged transaction fees
2. It would convert all your tokens into the cheaper of the two tokens.

For example, if the price of BNB is currently 330 BUSD and your range is between 300 and 320, once the price crosses 320, all your BNB tokens will be sold for BUSD, leaving you with only 320 BUSD tokens in your position. This could result in a significant outrageous loss if the price fails to recover. As long as the price stays outside the range you specified, there are no transaction fees for providing your liquidity.

Reading all this, you are probably thinking that this is way too complicated and requires a lot of administration, right? That’s why Thena has teamed up with Gamma and Algebra to simplify things for you.

Thena’s partnership with Gamma and Algebra

In cooperation with Gamma and Algebra, Thena manages your liquidity in the concentrated liquidity pools. This means you don’t have to constantly check if the current price is outside your specified range and reposition your range. It’s managed for you and rebalanced regularly, so you can continue to earn income without having to worry about constantly adjusting your price ranges.

Here is a simplified explanation of how this partnership works.

• When you provide liquidity on Thena, the liquidity is delivered to a hypervisor (a liquidity management contract managed by Gamma), which then delivers the tokens to Algebra’s Concentrated Liquidity Pools.
• Also, since the hypervisor delivers the tokens to the algebra pools, the hypervisor can rebalance position, i.e. change the price range of its position in the algebra pool, thus constantly earning rewards. The hypervisor is checked by Gamma every few minutes to see if it needs to be rebalanced and whenever the price hits its reset price the position is rebalanced.
• You will receive a hypervisor token as proof of your share of the tokens in the Thena pool, which you can use to redeem your tokens at any time.

Note: The gamma mentioned here refers to the gamma.xyz protocol and not to Planet’s GAMMA utility token.

How to get your rewards

This is in contrast to Uniswap V2 pools, where the transaction fees incurred came straight to you as an increase in the value of your LP token. The Thena Fusion pools provide you with all of the APY in the form of Thena. The transaction fees generated from the merger pools are used as bribes to Thena and liquidity providers generate revenue solely in the form of Thena tokens.

When you submit your tokens to Planet, Planet’s strategy sells the Thena rewards and turns them into GAMMA. After charging a performance fee, you will receive these rewards along with additional GAMMA rewards to help you earn even more. As always, the more GAMMA you have in the Infinity Vault, the more you earn.

Narrow pools vs. wide pools

If you are attempting to provide liquidity to fusion pools on Thena, you may have more than one pool for a token pair. One is called “Narrow”, the other “Wide”.

1. Narrow area pool: The narrow range pool strategy focuses on a tighter price range between two assets. This strategy works well for assets with high and positive price correlation as it focuses the price range where most trading activity takes place, thus maximizing the fees earned. The caveat here is that in highly volatile environments where prices are changing and changing and going out of range faster than the few minutes that Gamma is reviewing and rebalancing the pool, users would experience temporary losses.
2. Large selection of pools: The wide range pool strategy spreads liquidity across a wide price range between two assets. Because the spectrum is broad, the transaction fee earned would be less than with a narrow pool. However, for assets with low price correlation and significant price fluctuations, for example after a major release or unexpected news, wide pools do not suffer the temporary loss that narrow pools do.

Initially, Planet will only aggregate narrow pools as we believe these are the most profitable for our users. Here’s why.

• Fusion pools are new to our users and we want to simplify the selection and offer only the most lucrative option.
• For the fusion pools (corresponding to the V1 thena pools we have aggregated, which receive negligible APY from thena) we start with, the narrow pools have a much higher APY than the wider pools.
• Narrow pools act as both upside and downside hedges and the volatility that is currently in the market is more than offset by the increased fees generated by narrow pools.
• Since rebalancing your LP tokens happens within minutes in most cases, the outrageous loss doesn’t last and you start earning rewards once your position is out of range.

As always, AQUA owners can submit proposals through our governance to decide if they would like to add the pools of their choice, including wide pools.

New aggregate merger pools

These are the pools we’ll start with first

1. BTCB BNB
2. ETH BNB
3. USDT BNB

In the coming days and weeks, we’ll be expanding this list based on the pools our community wants to see.

This is how you supply thena fusion pools on the planet

Step 1: Get LP tokens

• Select the token you want to use to exchange for LP tokens, the number of tokens and click Approve.
• Approve the contract to access your token
• Click on “Create LP”.
• Approve the transformation transaction. Planet’s Zap contract exchanges your input token for the two underlying tokens of the LP pair you select, delivers those tokens to Thena, and provides you with the hypervisor tokens returned by Thena

Step 2: Deposit hypervisor tokens with Planet Farm

• Now click “Approve” in the pool for which you created LP tokens.

• Click Use Default to ensure approval is only requested once and approve the transaction

Click Use Default to ensure approval is only required once

• Enter the hypervisor tokens you want to use, or click MAX to select all your hypervisor tokens
• Click “Deposit” and approve the transaction

Migration of old thena pools

If you are migrating from one of the legacy Thena pools, click Done on the Pools page, scroll down to your legacy Thena pool, click Withdraw and approve the transactions to keep your liquidity from Remove planets, then click Convert. LP’ and select your target token to convert your tokens into the token of your choice. You can then follow the deposit steps above to deposit tokens into the new Fusion pools.

There will be No deposit fee of 0.1% for the first 48 hours so you can migrate at no additional cost.

If you have any questions, please contact us via Telegram. We’re a tight-knit community and one of the members or admins will be sure to help!

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