Range Mode
Range Mode
Gridix's Range Mode innovatively combines grid trading strategies with Uniswap's concentrated liquidity management. In this mode, the protocol divides a large liquidity range into smaller sub-ranges based on the user's settings. It then adjusts the liquidity in response to price fluctuations, executing buy-low, sell-high strategies to capture profits from price swings. In this mode, users not only earn grid profits but also continuously earn trading fees as they provide liquidity.
Workflow of Range Mode:
User Settings: Users select a large price range (e.g., ETH/USDC) and set the grid count and total investment amount (either single or dual tokens, with automatic conversion by the protocol).
Liquidity Deployment: The protocol divides the large price range into smaller sub-ranges and deploys liquidity accordingly:
Above the current price, ETH liquidity is deployed as sell orders
Below the current price, USDC liquidity is deployed as buy orders
Price Changes and Liquidity Adjustments:
When the price remains within the set range, liquidity remains unchanged, continually earning trading fees
When the price breaks above a certain upper boundary, the ETH in that range is automatically converted into USDC. The liquidity is then removed from the current range and redeployed to a lower range, similar to placing a new buy order
When the price falls below a certain lower boundary, the USDC is automatically converted into ETH. The liquidity is then removed and redeployed to a higher range, similar to placing a new sell order
This continuous process allows users to profit from market volatility while simultaneously earning trading fees.
Example for Range Mode:
Let's assume the user selects Range Mode with the ETH/USDC trading pair, setting the price range between $3,000 and $4,000, with 10 grids and a total investment of $10,000 USDC.
Price Range: $3,000 to $4,000
Grid Count: 10
Investment Amount: $10,000 USDC
Based on these settings, the system divides the large price range into smaller price intervals:
$3,000 - $3,100
$3,100 - $3,200
$3,200 - $3,300
$3,300 - $3,400
$3,400 - $3,500
$3,500 - $3,600
$3,600 - $3,700
$3,700 - $3,800
$3,800 - $3,900
$3,900 - $4,000
To initialize, the protocol exchanges part of the USDC into ETH based on the current market price (assuming it is $3,500). The protocol then deploys liquidity in the following way:
In intervals above $3,500, ETH is deployed as sell orders (increasing price range)
In intervals below $3,500, USDC is deployed as buy orders (decreasing price range)
For example, when the price is at $3,500:
In the $3,500 - $3,600 range, ETH liquidity will be deployed, acting as a sell order
In the $3,400 - $3,500 range, USDC liquidity will be deployed, acting as a buy order
If the price fluctuates within the $3,400 to $3,500 range, liquidity will remain active, and the user will continuously earn trading fees from the DEX without any adjustments to the liquidity.
However, if the price rises to $3,601, breaking through the $3,500 - $3,600 range:
The ETH liquidity in the $3,500 - $3,600 interval will be automatically converted into USDC (effectively selling ETH)
The protocol will remove liquidity from this range and redeploy it to the next lower price range, $3,400 - $3,500, as a buy order, in anticipation of a price drop
If the price then drops to $3,399, breaking below the $3,400 - $3,500 range:
The USDC liquidity in the $3,400 - $3,500 interval will automatically be converted into ETH (effectively buying ETH)
The protocol will remove liquidity from this range and redeploy it to the next higher price range, $3,500 - $3,600, as a sell order, in anticipation of a price rise
Through this cycle, the protocol continues to move liquidity between price intervals, effectively executing buy-low, sell-high strategies that capture price fluctuation profits while continuously earning trading fees. This process keeps the liquidity actively participating in the market, ensuring users maximize their returns.
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