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Uniswap v3 - Single-Sided Liquidity

Overview

The Uniswap v3 - Single-Sided Liquidity Proving strategy involves using a single asset, in this case USDC, and using a variety of protocols to provide liquidity on a decentralized exchange in order to earn yeild. There are a number of steps:
  1. 1.
    USDC is provided as collateral on Aave and borrows out a corresponding asset like Ethereum
  2. 2.
    The USDC and Ethereum is then deposited within a predefined range on Uniswap V3 to provide liquidity.
  3. 3.
    Due to the risks of impermament loss based on the inherent price movement of Ethereum, bots automatically readjust positions over time (or exit altogether in times of high market volatility) to minimize losses.
  4. 4.
    At the end of the period, the position is closed out on Uniswap and then on Aave.
  5. 5.
    This process repeats over time to earn cumulative rewards.

Summary

  • Network: Ethereum, Polygon
  • Protocol(s): Uniswap v3, Aave
  • Strategy Type: Liquidity Providing

Resources