With the introduction of concentrated liquidity pools, Uniswap V3 has made a major advance in potential capital efficiency, but currently these gains are most accessible to those with enough access to capital to make gas charges negligible and active liquidity management a viable service. We offer an alternative model, accessible to all users, that focuses on maximizing the capital efficiency of Uniswap’s liquidity pools as a whole.
Our project introduces zero-viscosity position management using so-called superfluidity pools. Using real-time cash flows built on the Superfluid protocol, we flow capital in and out of positions based on incoming price data using Uniswap’s proprietary oracle. By increasing our flow rate based on an asset’s price velocity, we are able to track price movements and allocate capital to positions with the highest earning potential. This means a significant increase in capital efficiency, taking advantage of a narrow concentrated liquidity spread while eliminating the risk of lost profits following a price move.
Uniswap’s documentation refers to the potential 4000x gains in capital efficiency by using concentrated pools of liquidity, but without active management it is difficult for the user to realize the full potential of this powerful tool. Super fluidity pools offer all Uniswap users a convenient and effective liquidity management strategy. The biggest obstacle for the average user is the gas cost of setting up new liquidity positions to take advantage of the ideal price range, but our approach circumvents this issue by managing positions through a central smart contract that holds a wide range of positions around the price at any time. Users deposit assets into a super fluidity pool, which then streams and transfers liquidity between an internal set of liquidity pools around the current price.
This project uses Svelte as frontend. We found Svelte to be easier to work with than a traditional web framework like React. Svelte loads as a single-page application and is actually a compiler. This means creating static assets that are easier to render than dynamic assets. In combination with Webpack, Svelte is particularly well suited for providing decentralized frontends that can render statically. We also used Javacrip SDKs from Uniswap and Superfluid. We found these difficult to use due to lack of API reference documentation. Instead there were some code snippets (which were useful) and a link to the Github repository. Also, we had trouble testing our code because we didn’t want to spend money on mainnet, but we wanted real price data. We weren’t sure how to do this, but a very helpful mentor pointed us to Ganache, which we used to create a local development chain from an Infura forked endpoint.
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