Integral FIVE
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Liquidity Provision (LP)
Mean-0 Impermanent Loss
Thanks to TWAP execution strategy, LPs of Integral FIVE (formerly Integral) enjoys mean-0 price impact and high capital efficiency.

Adding liquidity

Integral FIVE supports two ways of providing liquidity: Suggested Ratio, and Custom Ratio.
When you select Suggested Ratio, you will be asked to deposit both tokens at a fixed ratio. We recommend you to choose this method, as this significantly helps pools stay balanced.
When you select Custom Ratio, you will be able to deposit any amount of tokens into the pool. If you deposit only one type of token into the pool (a.k.a. Single-sided Deposit), the App will automatically convert your position to a two-token combination, whose ratio is determined based on the current pool ratio.

Example for depositing in Custom Ratio

Suppose the current pool ratio for ETH-USDC is 60% ETH and 40% USDC, and 1 ETH = 3000 USDC at the moment.
After depositing 10,000 USDC into the pool, your position will become 2 ETH and 4000 USDC.

LP tokens

After submitting, your order will be sent to the delay contract, and sit there for 5 minutes. During this time, the protocol will pick up price information from the oracle, and calculate TWAP. This price will be used to determine the value of your LP position.
Please note that once you submit an order, you will not be able to cancel it.
You will then receive LP tokens in pro-rata, which represents your share in the pool.

A more detailed explanation on LP Risk & Returns

High Fee APY

We require only 1/10 the AUM in order to provide the same level of liquidity. So given the same trade volume, our LPs earn 10x more Fee APY.

Mean-zero Impermanent Loss

LPs suffer from Mean-zero Impermanent Loss. This means that IL will oscillate around 0. Sometimes IL will be negative, making it more profitable to put asset into the pool than holding it in your wallet. In the long run, IL will converge to 0.
This is made possible with the built-in Uniswap oracle and trade delay mechanism. They will eliminate any frontrunning/cross-exchange arbitrageurs.

What's the catch for LPs? Cyclical Imbalance.

In order to achieve concentrated liquidity, our pool ratio will fluctuate cyclically around 50/50. This will also affect the asset ratio of your LP position, which always sticks to the pool ratio.
It is possible that you'll found the asset ratio of your LP position changes throughout the time. However, this is not impermanent loss, as the USD-denominated value of your LP positions does not change.
Cyclical imbalance does not affect long-term LPs. Given enough time, you will almost surely see the pool ratio revert to your initial ratio, with no loss.
Last modified 3mo ago