Directional Algorithm: Bull & Bear
Last updated
Last updated
Jones truly stands out with its Bull 🐂 & Bear 🐻 strategies that enable optionality for concentrated liquidity positions.
The Bull Strategy is the first of its kind to add upside position bias optionality to liquidity strategies.
This algorithm was born from user requests for more volatile token exposure for liquidity strategies.
They function the same as the neutral Range Assist Strategies, but with the key difference that a portion of the total liquidity, around 75%, is skewed to the upside.
Practically, this means that there will always be a portion of the LP that should sit above the range of liquidity that Range Assist Narrow & Wide can achieve, thus skewing the majority of the vault performance towards the performance of the volatile token itself while still retaining the ability to earn LP rewards.
This gives users the upside of having a skewed range of liquidity capable of generating rewards in upward price events, while correlating in value to the performances of the token of choice. All of this contained within a wider range, reducing the need to expose the user to frequent rebalances, thus avoiding impermanent loss.
Pros:
The performance of the strategy is more aligned to the performance of the volatile token compared to a 50/50 portfolio.
This strategy is well suited for pairs constructed of a volatile token against a stable.
This strategy is especially well suited in case of an uptrending market.
Bull liquidity can generate fees during these high volatility uptrend events.
Users will perceive that they are “more aligned to the market” with 75% of exposure to the volatile token at every rebalance.
Cons:
This strategy may underperform during a bear market.
It can produce a lower % of fees compared to Range Assist Narrow strategy.
The Bull Strategy is a less effective service to exchanges, since a portion of the liquidity is skewed further away from the current active tick.
The Bear strategy concentrates liquidity in the inverse fashion to the Bull strategy, but the outcome is not to benefit from downward volatility events.
Instead of maximizing bear market sentiment, the focus of the Bear strategy is to provide PROTECTION against downwards volatility while increasing yield in those instances.
Having a mix of Bull & Bear strategies can create some very interesting hedged scenarios for users, we can’t wait to see all of the creative ways that users, protocols, or funds will build on top of these novel concepts.
Pros:
This strategy is well suited in cases of a downtrending market.
Bear liquidity can potentially generate even more fees during high volatility downside events due to how markets strongly correlate and cluster volumes to the downside in these cases.
Cons:
In cases where the pair is constructed with a volatile token and a stable pair, it can cap the upside of the overall position more than the other strategies.
Nobody likes bears.
