Defi Edge - LP Management

Magma Finance is excited to have Defi Edge as the automated manager for concentrated liquidity positions of gauge vaults. They will actively modulate the band ranges to maintain a competitive balance by offering the best swap rates for traders without subjecting LP providers to excessive impermanent loss. Concentrated liquidity positions offers a trade off value proposition. The more concentrated the LP range (more narrow price band), the more efficient the swap is for traders and the smaller the price impact. However, this also increases impermanent loss for the LP providers. The appropriate solution is for an active management of these positions, such that an LP range should only be as narrow as required to be competitive. In this way, trading volume (and thus fees) can be maximized without incurring unnecessarily impermanent loss in the pool.