The first proposal entails a comprehensive risk modeling of impermanent loss for LPs, introducing a novel metric, Liquidity Position PNL, as a more effective measure of directional risk within a portfolio. This is followed by the introduction of a strategy involving the creation of various delta-hedging liquidity positions based on Liquidity Position PNL, the technical implementation of training the proposed delta-hedging strategy model via reinforcement learning, and the validation of the strategy's performance through backtesting.
The second proposal focuses on a minting strategy, starting with the introduction of a method to determine the probability of the In-The-Money (ITM) formula using Geometric Brownian Motion (GBM). Subsequently, LPs are guided on utilizing the probability of ITM formula to refine their liquidity ranges. The proposal continues with the technical implementation of training the minting strategy and concludes with the validation of its performance through backtesting.
Ultimately, the integration of these two strategies will be harmonized and implemented. The conclusion of our proposal outlines the projected timeline for the execution of these comprehensive strategies.
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