📈Fixed Width Strategy

What is Fixed Width Strategy?

Fixed Width Strategy is a liquidity management approach used to provide stable returns by maintaining a predefined price range for liquidity positions. Unlike dynamic strategies that frequently adjust based on market volatility, the Fixed Width Strategy ensures liquidity remains within a set price range, reducing the need for frequent updates.

Fixed Width Strategy in Farmly Easy Farms

In Farmly Easy Farm, the liquidity range is determined based on a predefined range width. Instead of selecting fixed upper and lower price limits, the strategy sets a range centred around the current price. The range width remains constant unless there is a significant price deviation.

If the price moves significantly outside the fixed range (e.g. 0.5%), the position is automatically updated to a new fixed range to maintain optimal liquidity efficiency.

Fixed Width Strategy Parameters

• Range Width: Predefined and fixed width around the current price.

• Rebalancing Threshold: 0% (the position is continuously updated when the price moves).

• Performance Fee: 20% (from trading fees earned by the strategy from farming, for details).

Backtest Results

Backtesting results for the Fixed Width Strategy are currently being finalized and will be shared soon. Our team is actively working on the analysis to ensure accuracy and reliability.