OrangeFinance: A liquidity management tool that can hedge against Uniswap V3.

2023-04-25 10:28

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Original author: hangry

Translated by: Kxp, BlockBeats

Recently, with the expiration of Uniswap V3 licenses, attention has shifted to the new CLAMM project and projects that simplify LP experiences. Today, let's talk about OrangeFinance and why it is best suited for the current situation.

Concentrated Liquidity

We all know that Uniswap V3 has introduced the concept of "concentrated liquidity", which allows you to define a specific range in which you want to provide liquidity, greatly improving the capital efficiency of LPs.

This new CLOB/AMM combination model poses a problem in that it achieves capital efficiency but increases complexity. We have all seen this statistic, that the majority of LPs lose money over time, due to the difficulty and high cost of managing V3 positions.

Orange Finance

Orange Finance is a Uniswap V3 liquidity management tool for hedging, serving as a real income treasury. You only need to deposit your own USDC, and Orange will automatically earn income by managing the liquidity of Uniswap V3.

Alpha Orange Vault

Alpha Orange Vault is the first product of Orange, which manages the liquidity of the ETH/USDC trading pair on Arbitrum. After thorough backtesting and adjustments, the vault successfully achieved a 25% annualized yield during a period of ETH price decline.

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Orange is superior to other liquidity management protocols, mainly due to two key components:

1. Orange has created a unique hedging control system that allows the protocol to hedge a certain amount based on price changes.

2. Orange uses an offline strategy module to automatically rebalance and rearrange positions based on market conditions. These modules allow Orange to consistently achieve sustainable and risk-adjusted returns in any market condition.

Other features:

· Vault rewards automatic compound interest.

· The Orange LP token can be used for liquidity mining to provide centralized liquidity, incentivizing holders to provide centralized liquidity within certain price ranges in order to receive more rewards.

· Only need USDC deposit

Specific Effect:

I mentioned before, but during the latest backtesting period, the fund successfully achieved a 25% annualized return during a decline in ETH prices, with trading fees alone generating approximately 95% annualized return.

Competitors:

Orange recently wrote a great article on this topic, and I strongly recommend that you read it. The article is about how Orange can outperform other protocols by setting a narrow range using its hedging control system.

Future Outlook

Next steps:

· The first vault will be launched on 4/28.· Launching Multi-Chain Vault· Supports longer-tail assets

· Supports non-Uniswap positions (Curve, Balancer, other centralized liquidity protocols, etc.)

Token Issuance:

We have confirmed the existence of a token, but it may take some time. However, tracking the project and participating in it will not incur any losses.

Alpha Orange Team:

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When it comes to participating in the project, Orange is running a closed group for users to access the first vault and obtain early project information.

Summary

With the passage of time, concentrated liquidity seems to be becoming increasingly popular, especially after the recent expiration of Uniswap V3. This makes liquidity management protocols increasingly important, and I believe that Orange is sure to be the winner.