Key Benefits

1. Centering Liquidity Around the Peg

1.1 Why Center Liquidity?

Traditional liquidity strategies react to price fluctuations, which can lead to inefficient liquidity deployment. HarmoniQ ensures liquidity remains optimally positioned around a defined peg, reducing unnecessary movements and maximizing fee earnings.

1.2 Defining the Peg

The peg is typically set at the current pool tick, but the strategy admin can adjust it to better reflect the ideal price in cases of market fluctuations. Liquidity is deployed within a Position Radius, ensuring it stays efficiently concentrated around the peg.

2. Dynamic Rebalancing

2.1 How Rebalancing Works

As the pool’s price (tick) moves, HarmoniQ automatically rebalances liquidity, ensuring it remains centered around the latest stable peg.

2.2 Optimizing Liquidity Positioning

The strategy performs swaps and repositions liquidity dynamically. This helps maximize returns while keeping liquidity in an ideal risk-adjusted range.

3. Median Observation for Stability

3.1 Avoiding Short-Term Volatility

Rather than reacting to every price fluctuation, HarmoniQ relies on Median Observation to make deliberate, data-driven adjustments.

3.2 How the Median is Calculated

The strategy takes multiple price observations over a set period (e.g., every 12 hours). It then calculates the median price, filtering out short-term noise and ensuring adjustments are based on broader trends.

4. Controlled Swaps for Efficiency

4.1 Minimizing Slippage

HarmoniQ executes swaps within a single tick, meaning (1) Minimal slippage (typically averaging within 0.5 ticks) and (2) The pool’s active tick never changes, ensuring liquidity stability.

4.2 Preventing Excessive Swaps

A Max Swap Percentage sets a cap on how much liquidity can be swapped in a single rebalance. This prevents over-adjustment and maintains safe liquidity positioning, even in pools with large external liquidity.

5. Periodic Adjustments for Stability

5.1 When Does HarmoniQ Rebalance?

The strategy triggers rebalancing only when (1) the median peg has moved, requiring an adjustment and (2) a swap can safely increase liquidity concentration without disrupting balance.

5.2 Ensuring Long-Term Efficiency

HarmoniQ’s controlled, data-driven adjustments prevent unnecessary trading. This ensures sustained profitability and liquidity stability over time.