This partnership of Tulip Protocol with the most user-friendly cryptocurrency exchange on the Solana blockchain, Orca, is to build concentrated liquidity vault strategies.

Tulip Protocol sees Wave 1 of the Whirlpools Builders Program as an interesting opportunity to grow its product line across the Solana DeFi ecosystem. They are proud to be a part of Orca’s mission to assist developers that create unique products.

A New Farm

Tulip Protocol has collaborated with Orca to develop focused liquidity vault techniques that minimize divergence loss and reward auto-compounding.

The vault employs a hybrid auto-compounding and rebalancing technique that allows user deposits to be classified into a limited number of tick ranges. This combines the compounding of liquidity provision rewards and the control of price/tick ranges within a pre-defined era.

In their backend, they’ve also included a new tool called “Autoswap,” which is powered by Jupiter Aggregator. This enables users to deposit uneven assets into the LP, and our backend will automatically exchange them to balance out before generating the LP, eliminating the need to browse into an AMM. Users will enjoy a one-click method to enjoy long-term yield with this vault.

How does this Work?

If the pair’s actual price reaches a threshold inside the specified price/tick range, the vault eliminates the liquidity until the next epoch. This enables the approach to handle Impermanent Loss, an issue for concentrated liquidity pools, particularly when one of the paired assets is volatile.

It is important to understand the different types of concentrated liquidity strategy vaults and how they are manage.

Vaults are Classified into Three Types: stable, pseudo-stable, and non-stable, each with its own set of concerns.

• Pure stable vaults: both paired assets are stablecoins. This category includes pairs like USH/USDC, USDH/USDC, USDT/USDC, UXD/USDC, etc. Pure stable vaults are typically managed using a strict strategy, which rebalances the position once the current tick index changes from the tick index that was active when the position created.
• Pseudo stable vaults: theoretically trade/pegged at price ratios similar to stable swaps, but paired assets aren’t price stable. This category includes pairs like SOL/stSOL, SOL/mSOL, etc. Pseudo stable vaults are usually managed using a midpoint strategy, which rebalances the position when the tick index changes by more than 50% from the tick index which was active when the position was created.
• Non-stable vaults: only one asset is stable, or neither paired assets are price stable. This category includes pairs like SOL/USDC, SOL/DUST, etc. Non stable vaults are typically manage using a variable strategy, which rebalances the position when the current tick index changes by X or more from the tick index which was active when the position created.

About Tulip Protocol

Tulip Protocol, the first yield aggregation platform, built on Solana with auto-compounding vault strategies.

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About Orca

Orca is the easiest way to exchange cryptocurrency on the Solana blockchain. Users can exchange tokens with minimal transaction fees. And lower latency than any DEX on Ethereum, all while knowing that you’re getting a fair price. Additionally, users may provide liquidity to a trading pool to earn a share of trading fees.

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SOURCE

https://medium.com/tulipprotocol/tulip-whirlpool-vaults-concentrated-liquidity-farming-bbb947ac1e57

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With decentralized market data from the industry-leading decentralized oracle network, users have stronger assurances that leveraged positions will be fairly liquidating. It’s using highly accurate price data and that the protocol will remain fully collateralized at all times.

Tulip Protocol takes advantage of Solana’s high-throughput and low-cost blockchain, enabling users to more frequently reinvest their yield and compound their assets without incurring excessive gas fees. With Chainlink oracles natively integrated on Solana, they can seamlessly access the most widely used oracles in blockchain to help provide users with advanced, secure, and reliable yield aggregation.

Tulip Protocol connects lenders who earn a yield on deposits with borrowers who want to access leverage. Users that open leverage positions must maintain a predetermined loan-to-value (LTV) ratio. They check with asset price data supplied by Chainlink Price Feeds. Accurate LTV ratios are a critical function in smart contracts as they determine when traders get liquidated and help protect lenders’ deposits, making the price oracle solution we use a core piece of infrastructure for our protocol.

About Chainlink

Chainlink is the industry standard for building, accessing, and selling oracle services. Needed to power hybrid smart contracts on any blockchain. Its oracle networks provide smart contracts with a way to reliably connect to any external API. Leverage secure off-chain computations for enabling feature-rich applications. Chainlink currently secures tens of billions of dollars across DeFi, insurance, gaming, and other major industries. And offers global enterprises and leading data providers a universal gateway to all blockchains.

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About Tulip Protocol

Tulip Protocol is the first yield aggregation platform on Solana with auto-compounding vault strategies. The dApp (decentralized application) is designing to take advantage of Solana’s low cost, high efficiency blockchain; allowing the vault strategies to compound frequently, benefiting yield farms with higher APYs, while no requiring active management, and with lower gas fees. Tulip now offers a wide variety of strategies for its users. Lending, Auto-Compounding LP Vaults, Leveraged Yield Farming, and our newly launched Strategy Vaults.

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RESOURCES

https://medium.com/tulipprotocol/tulip-protocol-integrates-chainlink-price-feeds-on-solana-to-help-secure-its-yield-aggregation-6a46bd237c7e

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The post Tulip Protocol Integrates Chainlink appeared first on Smart Liquidity Research.