Almanak x V3 - Optimization Recommendations

Community Chatroom (DISCUSSION)
30

Thursday 1 Dec., 2022

NEW RECOMMENDATIONS ARE IN

The following changes need to be implemented:

  • ETH: swapping fee at 0.8667% (from 0.9540%) with TL @ 94.0000% (from 91.2279%)
  • LINK: swapping fee at 0.8364% (from 1.2002%) with TL @ 91.0000% (from 97.6351%)
  • DAI: swapping fee at 1.3481% (from 0.8006%) with TL @ 92.4634% (no change)
  • WBTC: swapping fee at 1.2687% (from 0.4574%) with TL @ 94.0000% (from 91.3762%)
31

Friday 2 Dec., 2022

NEW RECOMMENDATIONS ARE IN

The following changes need to be implemented:

  • ETH: swapping fee at 0.3217% (from 0.8667%) with TL @ 93.0656% (no change)
  • LINK: swapping fee at 0.7506% (from 0.8364%) with TL @ 91.0000% (from 96.0903%)
  • DAI: swapping fee at 1.1375% (from 1.3481%) with TL @ 92.0000% (from 89.9267%)
  • WBTC: swapping fee at 1.0343% (from 1.2687%) with TL @ 94.0000% (from 92.4667%)
32

Saturday 3 Dec., 2022

NEW RECOMMENDATIONS ARE IN

The following changes need to be implemented:

  • ETH: swapping fee at 0.3217% (no change) with TL @ 94.0000% (from 91.7829%)
  • LINK: swapping fee at 0.8759% (from 0.7506%) with TL @ 91.0000% (from 97.3237%)
  • DAI: swapping fee at 1.1375% (no change) with TL @ 92.0000% (from 89.6862%)
  • WBTC: swapping fee at 0.8987% (from 1.0343%) with TL @ 94.0000% (from 92.4667%)
33

Sunday 4 Dec., 2022

NEW RECOMMENDATIONS ARE IN

The following changes need to be implemented:

  • ETH: swapping fee at 0.8297% (from 0.3217%) with TL @ 94.0000% (from 92.1379%)
  • LINK: swapping fee at 0.0807% (from 0.7506%) with TL @ 91.0000% (from 97.3408%)
  • DAI: swapping fee at 1.5608% (from 1.1375%) with TL @ 92.0000% (from 89.6359%)
  • WBTC: swapping fee at 1.2906% (from 1.0343%) with TL @ 94.0000% (from 92.4441%)
34

Monday 5 Dec., 2022

NEW RECOMMENDATIONS ARE IN

The following changes need to be implemented:

  • ETH: swapping fee at 0.6812% (from 0.8297%) with TL @ 92.7438% (no change)
  • LINK: swapping fee at 0.9175% (from 0.0807%) with TL @ 96.3086% (no change)
  • DAI: swapping fee at 0.5723% (from 1.5608%) with TL @ 93.6551% (from 90.4747%)
  • WBTC: swapping fee at 0.7165% (from 1.2906%) with TL @ 92.6335% (no change)
35

Weekly Report - Week#47 - Nov 28th-Dec 4th

Almanak Weekly Report Web Access

ANNOUNCEMENT:

  • The recommendation frequency is pushed to weekly since the very low volume renders daily recommendations ineffective, hence unnecessary
  • Weekly report will be maintained
2 Likes
36

Wednesday 14 Dec., 2022

NEW RECOMMENDATIONS ARE IN

The following changes need to be implemented:

  • ETH: swapping fee at 0.8273% (from 0.6812%) with TL @ 85.4628% (from 92.4991%)
  • LINK: swapping fee at 1.9102% (from 0.9175%) with TL @ 86.7495% (from 100.0000%)
  • DAI: swapping fee at 1.5619% (from 0.5723%) with TL @ 75.2182% (from 91.4637%)
  • WBTC: swapping fee at 2.0629% (from 0.7165%) with TL @ 89.3909% (from 92.3567%)
37

Monthly Report #1 - Nov 14th - Dec 13th

Almanak Monthly Report Web Access

Key facts

  • Overall protocol deficit declined over the month
  • Fee recommendations are accurate and synced with market liquidity/volatility
  • Almanak-managed pools outperform the other pools, generating additional revenue

Monthly Results

  • Protocol Deficit: 1-month decrease of 16%, circa $5M
  • Swapping Fee: Overall increase of the fees to support the revenue while striking the balance with required arbitrage volume
  • Trading Liquidity: TL maintained at historical levels and adapted to frequency switch (d to w)
  • Almanak Fee Perf.: Almanak fee maintaining upside atop the benchmark market fee (BMF) indicating outperformance
  • Almanak Pools Perf.: Ratio Fee/Volume above non-Almanak pools despite observed decrease in volume across the market
  • DAI vs Other Stables: Fee revenue trend for DAI pool compares steadily to other stables at slightly below level

Next Steps

  • We identified avenues of improvement/focus that we’ll address in the next month:
    • Monitor closely DAI pool vs other stables to avoid structural breaks
    • Implement the similarity metric we have developed to assess structural breaks
    • Optimizing the TL with a 5% step instead of decimal to align operational update process
    • Continue improving the report to make it more legible, more insightful
1 Like
38

Wednesday 21 Dec., 2022 – WEEKLY UPDATE

NEW RECOMMENDATIONS ARE IN

The following changes need to be implemented:

  • ETH: swapping fee at 0.8273% (no change) with TL @ 84.6602% (no change)
  • LINK: swapping fee at 1.9102% (no change) with TL @ 86.9419% (no change)
  • DAI: swapping fee at 1.5619% (no change) with TL @ 72.5865% (no change)
  • WBTC: swapping fee at 2.0629% (no change) with TL @ 87.2917% (no change)
1 Like
39

How would you comment the LINK pool volume ? LINK pool = $11,352,667 . In the last few days we have this volumes :
21th $1317
22th $3898
23th $1166
24th $0?
25th $3169
26th $0?
27th $262
28th $282 until this moment

I mean,I myself made more volume with Link on another chain.Do you really think these recommendations work? $8777 in volume for a $11M pool.With a 1.91% fee that’s $170 in fees in a week from one of the biggest pools in Bancor? Uni LINK / ETH has $2M in volume from a $17M liquidity. I know it’s like comparing apples and oranges,but still,the difference it’s absolutely gigantic.

1 Like
40

No new recommendation in the last 15 days? Is everything ok ? Also,did you have time to check my post? I would love to hear an objective answer.Thank you.

41

Hi @mh89spd –
Thank you for your messages, appreciate the follow up!
Recommendations are automatically pushed to Telegram ans Discord, if you want to have the latest update. We push them here manually since Discourse doesn’t allow for automation. We will update the last two weeks today, apologies for the delay.
Also, note the last week of 2022 was “no change” for the 4 pools.
Slight changes were observed this week.
I will answer your initial question in another message.
All the best.

42

Wednesday 28 Dec., 2022 – WEEKLY UPDATE

NEW RECOMMENDATIONS ARE IN

The following changes need to be implemented:

  • ETH: swapping fee at 0.8273% (no change) with TL @ 84.5624% (no change)
  • LINK: swapping fee at 1.9102% (no change) with TL @ 87.2051% (no change)
  • DAI: swapping fee at 1.5619% (no change) with TL @ 72.4058% (no change)
  • WBTC: swapping fee at 2.0629% (no change) with TL @ 88.8666% (no change)
43

Wednesday 4 Jan., 2023 – WEEKLY UPDATE

NEW RECOMMENDATIONS ARE IN

The following changes need to be implemented:

  • ETH: swapping fee at 0.7472% (from 0.8273%) with TL @ 85.0520% (no change)
  • LINK: swapping fee at 1.7628% (from 1.9102%) with TL @ 88.2793% (no change)
  • DAI: swapping fee at 1.5791% (from 1.5619%) with TL @ 72.7614% (no change)
  • WBTC: swapping fee at 1.8977% (from 2.0629%) with TL @ 89.3844% (no change)
44

Hi @mh89spd ––
You pinpointed the big challenge, effectively.

As a first comment, note that our optimization and recommendations run on V3 only, the figures you have highlighted above are from v2.1. Also, it seems you have passed on a 1day delay in reporting them, e.g. on 21th, v2.1 volume is $3,898 and on the 22nd $1,166, etc…

That being said, our recommendations, started on Nov 14th, 2022, aim at optimizing the decrease in the protocol deficit.
For the recommendations to be efficient and impactful requires a minimum volume as you can imagine.
Furthermore there is a relationship between the level of fee bp, the volume attracted on a pool, and the current impermanent loss (i.e. depending on price volatility) to be rebalanced.

That is why our optimization engine takes the latter into account by simulating the agents’ behaviours, in particular the arbitrageurs’ one, over a period of a week, with hourly steps (or blockheight) in order to strike the optimal balance.

Getting a complete and objective performance analysis is complex since various forces are involved. You can take a look at our last report to get a breakdown over the first month. It definitely is a data reporting challenge that we take seriously and are dedicated to make continuous improvements on.

Now, for a given price action, there’s only so much a recommended level of fee bp can do to attract “core” volume, and a great part of the attractiveness of a protocol relies on other structural and foundational drivers. Our analysis, (corroborated by other studies), show that fee elasticity of liquidity providing is in fact rather low. I encourage you to take a look at our last Medium post on that topic here.

Hope this clarifies the point.
Happy to enter into more details if need be.

45

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image1914×563 43.2 KB

I actually believe I got the right numbers,those for V3.As you can see,on 28th we can see the biggest daily volume of that week and it was $4264. I appreciate the complex answer and I appreciate your time.My short and straight to the point question is: Don’t you think the recommendations applied influenced the volume in this negative way? Or you think that week was just weak one with no volume? A good comparison that most LPs could probably understand better would be the performance of V2.1 which has a fixed fee and V3 which has your recommendation.This could really give us a big hope if it’s a positive comparison.

46

Hi @mh89spd –
What you reported in your first message (see below) are v2.1 figures of Daily Volume for LINK pool – with a one day delay as mentioned.

21th $1317
22th $3898
23th $1166
24th $0?
25th $3169
26th $0?
27th $262

See here a highlight of Dec. 22nd 2022 – it shows $1,166, which you reported for the 23th.

Screen Shot 2023-01-11 at 7.01.47 PM
Screen Shot 2023-01-11 at 7.01.47 PM3416×1194 332 KB

As for your the screenshot above it indeed shows the Daily Volume for LINK pool for v3.
Anyway let’s not get hung up on this, shall we!

To answer your question, I think the screenshot you provided actually comes very handy.

  1. First observation is that the last 1-2 weeks of the year is probably the last one you want to look at to get any objective insightful reading at markets. The high seasonality of markets often implies incorrect conclusions. And it’s common knowledge as well that the first week of Jan is “abnormally active and bouncing on markets”. This is due to traders portfolios rebalancing effects at year close.

  2. Second, if we still want to look at it with the recommendations in mind, recall fee was slightly decreased on Jan4th for LINK, from 1.91% to 1.76%. This is really thin but our current threshold to trigger a fee change is 15bp. As you can see, the volume observed in the current week Jan4th-Jan11th is rather below the previous week’s one. So the conclusion you’re trying to draw is definitely not obvious. As explained before, various other drivers interact.

I like the suggestion of comparing v2.1 to v3 in principle but it is unfortunately source of confusion if not irrelevant imho. The former has structural differences(*) that would make the comparison really hazardous because of the discrepancies in agents behaviours they imply. v2.1 and v3 are not used for the same reasons at all by LPs/traders.

(*) e.g.:

  • deposit disabled on all v2 pools
  • withdrawal deactivated in 2.1 until late Nov.
  • all the POL left in v2.1 is owed to stakers since migration
  • 90% of fees for buyback/burn in v3 vs 100% in 2.1 which impacts the on-curve liq growth in v3
  • etc…

Lmk your thoughts.
All the best.

1 Like
47

Thursday 12 Jan., 2023 – WEEKLY UPDATE

NEW RECOMMENDATIONS ARE IN

The following changes need to be implemented:

  • ETH: swapping fee at 0.7472% (no change) with TL @ 84.8752% (no change)
  • LINK: swapping fee at 1.7628% (no change) with TL @ 84.7160% (from 90.4957%)
  • DAI: swapping fee at 1.5791% (no change) with TL @ 73.2833% (no change)
  • WBTC: swapping fee at 2.1658% (from 1.8977%) with TL @ 90.6833% (from 98.9823%)
1 Like
48

Friday 20 Jan., 2023 – WEEKLY UPDATE

NEW RECOMMENDATIONS ARE IN

The following changes need to be implemented:

  • ETH: swapping fee at 0.7472% (no change) with TL @ 84.9269% (no change)
  • LINK: swapping fee at 1.7628% (no change) with TL @ 81.7840% (no change)
  • DAI: swapping fee at 1.5791% (no change) with TL @ 74.0919% (no change)
  • WBTC: swapping fee at 2.1658% (no change) with TL @ 92.7949% (no change)
1 Like
49

Thursday 2 Feb., 2023 – WEEKLY UPDATE

NEW RECOMMENDATIONS ARE IN

The following changes need to be implemented:

  • ETH: swapping fee at 0.9000% (from 0.7472%) with TL @ 93.0000% (from 85.4608%)
  • LINK: swapping fee at 0.6000% (from 1.7628%) with TL @ 75.0000% (from 82.0479%)
  • DAI: swapping fee at 0.7000% (from 1.5791%) with TL @ 75.3171% (no change)
  • WBTC: swapping fee at 1.2000% (from 2.1658%) with TL @ 93.0720% (no change)
1 Like