Here are the top 10 most frequently asked questions about PowerPools:
1. What are PowerPools?
Powerpools are automated market making pools (AMM) similar to Uniswap V3, a product we are iterating on in PowerTrade that allows you to earn yield in USD with zero fees.
2. Are there fees to PowerPools and is it free to use?
Zero fees for adding, removing, reinvesting liquidity - completely free to use. PowerPools manages a buy/sell ladder between two price levels.
3. Whats the advantage of PowerPools over Uniswap v3?
We've taken the theory behind the Uniswap v3 smart contract and implemented it on a central limit order book. By doing this we found a number of advantages:
- No network fees / construction fees. so it's more attractive to smaller players (under $1M)
- Higher yields because it captures more noise
- No possibility of mempool tricks so it can't be front-run, which is a problem on the blockchain
- PowerPools return about 15% higher yield than Uniswap because they're more efficient
4. Is there liquidity and how do they work?
- There's already liquidity in our exchange due to these pools - they're fully functional. If you create a pool now, you can start earning as soon as the market moves more than a few bips
- We have LPs and options tightly integrated on the platform. The pools are slightly short gamma but on average they generate enough return to more than pay for longer dated option gamma
- You're trading instantaneous vol returns for longer dated upside opportunity
5. How can I hedge my pools?
PowerPools is tightly integrated with the PowerTrade exchange platform, allowing you to hedge your risk by placing quick and simple defensive options trades within PowerTrade.
6. How can I select a range?
We provide a default range of +30%, -15% - so we assume some upside bias.
- ~+-15% is a reasonable range if you want to set and forget
- If you're looking to generate a larger return, you can set your ranges tighter +-5%, but this requires more maintenance and you'd need to be prepared to hedge
- If you prefer to only check once a year, +- 50% range will be sufficient
7. How can I hedge my pools?
You can buy options separately within PowerTrade.
8. What's the base currency used in PowerPools?
The internal exchange base currency is synthetic USD - we will soon be extending the number of stablecoins and networks that we can transact with. For now it's ERC20, but we'll be adding Solana very soon.
9. What's the next plan for PowerPools?
- May 2022: The next version will add a feature that allows the pool's range to gently drift to track the market, ensuring that your pool stays in range for longer (Drift feature)
- June 2022: We're releasing the automatic option buying feature, so the pool can be configured to use its profits to automatically buy gamma
- September 2022: Adding analytics and back-testing UI, to get better idea of a pool's performance as you build it
10. Where can I try PowerPools
You can create a pool and use the product here: https://app.power.trade/pools
We'd love to hear from you! Want to see some new features? Send your feedback to [email protected]