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Visor Vault
An overview of Visor's public suite for actively managed concentrated liquidity pools

Introduction

With the introduction of concentrated liquidity on Uniswap V3, Sushi Trident, and other platforms, a need has arisen for public liquidity management services.
Visor's asset management technology stack can offer advanced liquidity management services to the public.
Visor Vault was created using technology like NFT Smart Vaults, Hypervisors, and Supervisors. Visor Vault is non-custodial and can adapt new strategies without migration. Visor Vault also includes a dedicated analytics user interface to provide critical data, statistics, and charts for the user.

Concentrated Liquidity

Providing liquidity to concentrated liquidity platforms is significantly more difficult because liquidity providers are required to provide liquidity at set price ranges, so if the price of the underlying asset moves outside of the set price range, the LP no longer earns fees without re-adjusting the price ranges.
Concentated liquidity in action at Uniswap V3
For example, if a user provides liquidity for the ETH-USDT pair at a price range between $2,500 - $3,000, and the price of ETH rises above $3,000, the user will no longer earn fees. Additionally, fees earned from providing liquidity are not automatically re-invested, and the user is exposed to impermanent loss.
The narrower the range that liquidity is provided, the greater the capital efficiency and the greater the yields that may be earned by the LP. But, these tight ranges come with increased risk (impermanent loss)

Active Management

Visor's Supervisor contacts (Hypervisor + input strategies), automatically manages the price ranges, rebalances assets, and re-invests earned fees to generate yields in an optimal fashion. This approach is superior to a passive LP option.
Active management of the LQTY-WETH Hypervisor. The dark grey bars represent the ranges being set.

Deposit Options

Visor supports both double-sided and single-sided liquidity, meaning that users can deposit both, or either asset into liquidity pools. Visor Vault automatically balances the position so the user will receive an LP percentage based on the value of the contributed assets.
Two assets
One asset
Here are examples of single-sided and dual-sided liquidity deposits using the Liquity (LQTY-WETH) Hypervisor:
Single-sided deposit into the LQTH-ETH Hypervisor
Dual-sided deposit into the LQTH-ETH Hypervisor

Withdrawal Options

Visor's withdrawals are dual-sided. There is no single-sided withdrawal support. Users will receive assets directly in proportion to the assets in the pool regardless of what the user originally deposited. If a user hypothetically deposited only USDC into the ETH-USDC pair, they will receive back USDC and WETH upon withdrawal.
Dual-sided withdrawal
Here is an example of a dual-sided liquidity withdrawal using the Liquity (LQTY-WETH) Hypervisor:
Withdrawal in action
The red box indicates the original position withdrawal, the blue box indicates the accrued and compounded fees, and the green box indicates the uncompounded fees
Note: 10% VISR staking fees are taken on rebalances, not withdrawals. That's why those respective fees are not included in the above transaction.

Fee Mechanics

The Annual Percentage Returns (APRs) on the dashboard refer strictly to fee-based APR, which is total fees earned as of the last rebalance divided by the current value of assets. The APRs currently do not reflect impermanent losses or the change in valuations of the underlying assets.
Fees generated by a pool
Fees are auto-compounded in pools for greater returns and efficiency on rebalances. This is also when the 10% fees are taken and provided to VISR stakers via the "Swap" contract. Rebalances also "lock-in" any impermanent loss suffered from the asset price changes.
Here is an example of a rebalance on the Liquity (LQTY-WETH) Hypervisor::
Rebalance in action
The red box indicates the position + accrued fees, the blue box indicates the Swap contract removing the 10% fees for VISR stakers, and the green box indicates the deposit of a new rebalanced position.

Impermanent Loss

Impermanent loss is the primary enemy of concentrated liquidity providers and of Visor Finance.
Impermanent loss happens when you provide liquidity to a liquidity pool, and the price of your deposited assets changes compared to when you deposited them. The bigger this change is, the more you are exposed to impermanent loss. In this case, the loss means less dollar value at the time of withdrawal than at the time of deposit.
Liquidity pools that contain assets that remain in a relatively small price range will be less exposed to impermanent loss. Stablecoins or different wrapped versions of a coin, for example, will stay in a relatively contained price range. These pools will generate fewer fees, though.
Concentrated liquidity platforms have significantly better capital efficiency and fee production, but they also can amplify the effects of impermanent loss.
Visor's Supervisors attempt to mitigate impermanent loss through smart rebalancing, anticipating market conditions, evaluating metrics, and more.

Deposit Caps

To keep funds secure while Visor is testing, auditing, and growing, Visor has implemented caps on deposits to the Visor liquidity pools. These caps protect users against flash loan attacks, front running, and a variety of other malicious attacks that could compromise the user or the system itself.
There are no restrictions on the number of deposits a wallet can make into Visor liquidity pools. So, if a user wishes to move more money into the LP while caps are active, they should make more deposits.
There are two types of caps. A progressive cap and a max deposit cap.
A standard hypervisor

Progressive Cap

A progressive cap is a restriction that prevents the user from depositing into a pool when it reaches a certain TVL in relation to Visor's overall TVL. This is represented on the UI "Progressive cap [percent value]%". Progressive caps can be raised by the team, or by the overall TVL increasing.
A progresive cap filled more than halfway

Max Deposit Cap

A max deposit cap is a restriction that prevents the user from depositing into a pool when the deposit values exceed certain thresholds. This is represented on the UI "Max [token symbol] Deposit". Max deposit caps can be raised by the team.
A deposit cap of 2 WETH and 10 OHM

What happens if I attempt to go over the caps?

If a user attempts to deposit over the progressive cap or max deposit caps, they will encounter a transaction that costs an absurdly large amount of gas. Shown here for reference:
An attempt to deposit over the progressive or deposit cap

Analytics

An updated analytics dashboard is currently being rolled out on Visor Vault. You can also use Zapper.fi to evaluate your vault and staking holdings.

Listing Criteria

Visor Vault has basic listing criteria to avoid unnecessary risks.
The list of considerations are:
Criteria
Ideal Situation
The average return for the past X days
Higher average returns
Return Interval
More frequent returns
Total value locked (TVL) in pair
Higher TVL
Fee tier
Fee tier with the best volume
Pair date of inception
Older date
Amount of trades
Higher number of trades
Total fees generated
Higher fees generated
Trading volume
Higher trading volume
Fees/TVL
Higher ratio
% of Pair Vol in Tier
More allocation per tier
Number of Trades
Higher number of trades
Change in Volume
More consistent volume
Change in USD value of TVL
More consistent value
Last modified 16d ago