Strategies
The Strategies page acts a repository showing earning opportunities across the ecosystem, both Automated Market Making strategies for RUJI Trade orderbook (provided by RUJI Pools), and opportunities such as Lending, staking, providing liquidity for Perps trading, or strategies provided by other ecosystem projects. This list will be updated as more protocols roll out and more opportunities become available.
Before making a deposit, make sure to read the Terms & Conditions and understand the risks. Rujira is a suite of open-source, permissionless, non-custodial smart contracts—we simply provided tools, not financial advice or advice of any sort. Use the tools at your own risk.
Automated Market Making (AMM) Opportunities
XYK Strategy
The XYK strategy uses a pricing and order sizing algorithm replicating the standard XYK (constant product) logic used by a traditional AMM-DEX like Uniswap v2, but tailored for an orderbook DEX.
The strategy looks to maintained a 50/50 balance (in term of dollar value) between the two tokens in the pair (e.g. BTC/USDC). This means, as prices move, the strategy is selling the outperforming token (e.g. BTC) and buying the underperforming token (e.g. USDC). As prices reverse, the strategy automatically rebalance towards the initial state, but it buys back the (now underperforming) token (e.g. BTC) at a slightly lower price than what it was sold for. The difference (spread) between the price the token was sold for and the price it was bought back at, multiplied by the quantity bought/sold, net of RUJI Trade maker fee, represents the market making profit of the strategy. The return generated is automatically compounded inside the LP.
The XYK strategy can be thought of as a 50/50 index composed of two tokens that generates some yield when there is volatility. It lowers the risk of underperformance to the downside vs. a simple buy & hold strategy, but it also lowers the upside potential. An XYK strategy with half of the LP in stablecoin is a good alternative to buy & hold for the more risk-adverse profiles willing to sacrifice upside potential to mitigate downside risk.
Example: To understand the XYK Strategy's risk profile, let's look at a few scenarios:
At T=0: BTC trades at $100k, Alice and Bob have each $100 to invest, Alice uses the full amount to buy BTC; Bob puts it into a BTC/USDC XYK LP ($50 in BTC paired with $50 in USDC).
At T = 1: BTC price has dropped by -20% to $80k. Alice's buy & hold positon is now down by -20% at $80, tracking BTC loss perfectly. Thanks to the XYK strategy, Bob's LP position is only down by -10.6% at $89.4 (excluding yield); on top of that, the position generated ~$2 in market making profits, putting Bob's total position value at $91.4, down -8.6% only, doing significantly better than Alice and her buy & hold strategy in a bear market scenario.
At T = 2: BTC price has bounced back by +50% to $120k. Alice's buy & hold positon is now worth $120, up +20% vs. entry, tracking BTC gains perfectly. Bob's LP position is now worth $109.5 (excluding yield) and generated another ~$2 of yield bringing the total position value to ~$113.5, also up, but only +13.5% vs. entry. In a bull market scenario, the XYK strategy is still performing well, but not as good as Alice and her buy & hold strategy.
Key Risk: Impermanent Loss (IL) is the loss in the LP value due to the change in quantity of token X and Y during a given period, due to the AMM selling the outperforming token and buying the underperforming one. This loss is in addition to price gain/loss due to the change in prices, assuming the quantity of token X and token Y in the LP had remained the same. The loss is called "impermanent" because it reverses if prices come back at the level they were at the time of deposit. It is commonly presented as a risk in DeFi, but it's actually a powerful feature if you don't want to time the market for your entry and exit.
Custom Concentrated Liquidity (CCL) Strategy
The CCL strategy allows users to provide liquidity inside a custom range, with a high level of customization allowing for more opinionated market making and much higher capital efficiency vs. traditional XYK strategies.
To participate, user must set a series of parameters:
Set the high and the low of your range: Above the upper end range, you are 100% in quote asset (e.g. USDC); Below the lower end of the range, you are 100% in base asset (e.g. BTC). Assuming you want to provide liquidity to the BTC/USDC pair, the two questions you should look to answer when setting your range are:
At what price are you happy to be 100% in BTC? That will be the bottom of your range.
At what price are you happy to be 100% in USDC? That will be the top of your range.
Set the spread: This is the target profit per round trip (i.e. sell quantity Q at price X, buy back same quantity at X minus spread). The higher the spread, the more profit you will be making per trade, but the more volatility you will need to complete a round-trip.
In high volatility environment, higher spread will tend to generate higher returns.
In low volatility environment, lower spread will tend to generate higher returns.
Set the skew: This defines the shape of the liquidity inside the range; you can keep it uniform, or skew more towards the center or the edges.
For stable pairs like wBTC/BTC, you probably want most of the liquidity very close to the center of the range which you would likely set to be 1 wBTC = 1 BTC, but it allows you to still have some liquidity to catch the wider wicks.
For a volatile pair like BTC/USDC, you might want to overweight the end of the range, so you sell more BTC when price get closer to the top, and buy more when price get closer to the bottom, realizing capital gain on top of the yield from the spread as price move from one side of the range to the other.
Set the fee: This is the profits from the spread that are retained as claimable yield. "fee" can be set to any value between 0 (profit 100% compounded inside the position) and "spread" (all the profits are claimable as yield).
Example 1: Wide range on the BTC/USDC pair
Alice has 10,000 USDC to invest, she has a long-term investment horizon, she checked the chart and believes BTC has a strong support at $70,000 and a strong resistance at $150,000.
She is happy to be 100% in BTC below $70,000, at which point she will close her position and keep the BTC with the aim of selling a portion for USDC and open a new position when BTC price will have recovered, effectively using the CCL position as a tool to average down on BTC.
She is happy to be 100% in USDC above $150,000, at which point she will close her position and keep the USDC with the aim of selling a portion for BTC and opening a new position when BTC price will have dropped again.
Current BTC price is $100,000, she swaps some of her USDC for BTC to get the correct ratio based on her chosen range, and opens a position with the following parameters:
Spread: 0.10% --> Her position will automatically sell BTC every time price moves up by 0.10% and buys back every time the price moves down by 0.10%.
Fee: 0.10% --> She wants to use this position to create an income stream to complement her salary. She sets the fee equal to the spread to maximize her claimable yield.
Skew: 0 (balanced) --> She wants her positions to generate a relatively stable income, no matter where the price is inside her range, so she keeps the distribution of her liquidity uniform inside her range.
Every time the price moves by at least 0.10% inside her range, she generates some yield. The more the price moves (= volatility), the more yield she generates. She will be able to monitor the performance of her position with detailed analytics from the Strategies page, and claim her yield periodically to supplement her income. Just like that, Alice became a market maker!
Example 2: Narrow range on the BTC/USDC pair
Bob has 1,000 USDC to invest, he has a short-term investment horizon and actively manages his portfolio. He likes to open positions with a tight range around current price, maximizing his return while the price stays in his range. When the position gets out of range, he doesn't mind waiting for the price to move in his favor to re-open a new position.
Current BTC price is $100,000, he decides to open a position with a tight +/-1.5% range around current price (low = 98,500 USDC / high = 101,500 USDC).
If his position gets out of range by the top, his plan is to close the position, keep the USDC and wait till price falls below 98,500 USDC to buy back some BTC and open a new position with a +/-1.5% range again.
If his position gets out of range by the bottom, his plan is to close the position, keep the BTC and wait till price rises above 101,500 USDC to sell some BTC and open a new position with a +/-1.5% range again.
He swaps some of his USDC for BTC to get the correct ratio based on his chosen range, and opens a position with the following parameters:
Spread: 0.05% --> His position will automatically sell BTC every time price moves up by 0.05% and buys back every time the price moves down by 0.05%.
Fee: 0% --> He doesn't want any claimable yield, he prefers to maximize his return by compounding 100% of his trading profits inside his position.
Skew: 5x at the edges --> He is fairly confident that his position will oscillate a few times between the edges of his range before getting out and wants to maximize his capital gain on those swings. So, he sets an aggressive skew to 5x at the edges, which means he will be buying 5x as much at the low of his range than he would at current price, and selling 5x as much at the high of his range than he would at current price.
He will be able to monitor the performance of his position from the Strategies page, however, given he set the "fee" parameter to 0, the APR will also be 0%, but he will still be able to track to total performance of his position by looking at the MOIC (Multiple of Invested Capital) which is a measure of total investment performance, including trading profits and price gain/loss.
Base Layer Virtualization Strategy
The strategy does not require any external liquidity providers to run as it relies on just-in-time borrowing from the Lending vaults to fill the quotes. Profits from the strategy are accumulated into the contract and act as a Security Fund that could be use to cover bug bounties and potential exploits up to the amount available in there.
THORChain CLP Strategy
Provides liquidity to THORChain Continuous Liquidity Pools paired with RUNE on the Base Layer, using a constant product (XYK) bonding curve. Benefits and risks are similar to those of the XYK Strategy on the App Layer. Yield is generated from a dynamic slip-based fee, which increases alongside the size of the swaps relative to the total liquidity in the pool. LPs in the pools also receive a share of the Rujira revenue that is sent to THORChain. The slip-based fee and Rujira's revenue are distributed between LPs and THORChain Node Operators depending on the state of the Incentive Pendulum. The share going to LPs is then distributed between each pool proportionally to their contribution to the total slip-based fees. More info: https://docs.thorchain.org/thorchain-finance/continuous-liquidity-pools
Other Core Opportunities
Lending Vaults
Generate passive returns by lending your crypto assets, with a relatively low risk profile (all loans are overcollateralized) and no exposure to Impermanent Loss. The yield comes from borrowers which are charged an interest rate every block based on the utilization rate of the borrowed asset compared to the total supplied available for lending.
Perps Liquidity Provisioning
Provide liquidity to the RUJI Perps protocol and earn yield for doing so.
Deposits are used by traders as counter-collateral for their positions. In return, you receive LP or xLP tokens that generate yield which comes from fees paid by traders. These are the APRs you see displayed for each liquidity pool.
LP tokens that are not currently locked in trader positions may be redeemed immediately for the liquidity that you provided.
Redeeming xLP tokens takes 45 days from when you submit the request—these tokens unlock linearly over this time period, and you receive the APR from LP tokens on the full amount.
Once you have accrued yield, you may withdraw it at any time directly to your wallet or reinvest it to earn additional yield.
Key Risk: Deposits are not risk-free. When traders win, counter-collateral is removed from the liquidity pool and LP/xLP tokens lose value. But when traders lose, your LP/xLP tokens increase in value. This is referred to as impairment.
This is part of the RUJI Perps product built by Levana which will be deprecated. Deposit have been disabled.
Staking
RUJI
Stake RUJI to earn a share of Rujira core protocols revenue. Stakers got two options with revenue shared 50/50 between each:
Single-sided RUJI staking: Get a share of 50% of Rujira protocols revenue with pure exposure to RUJI and no Impermanent Loss risk.
RUJI/RUNE LP staking (pending): Get a share of 50% of Rujira protocols revenue with a dual exposure to RUJI and RUNE. Staking with a LP token means your are taking Impermanent Loss risk, but you will also earn a share of the trading fees in the RUJI/RUNE LP.
For each option, tokens can be staked to earn claimable USDC, or set to auto-compound, buying & staking more RUJI (or RUNE/RUJI LP) with the USDC rewards automatically.
Users opting for the auto-compound option receive sRUJI (or sRUJI/RUNE LP), a liquid representation of their share in the strategy that can be redeemed for RUJI (or RUJI/RUNE LP) at any time.
bRUNE (Liquid Bonded RUNE)
Stake bRUNE to access THORChain node bonding through a simple, permissionless interface, with instant liquidity to get in and out.
Each bRUNE is always backed by at least 1 RUNE in the contract + unclaimed accrued yield. The contract bonds RUNE to a diversified set of THORChain nodes on the behalf of users and distributes the resulting bonding yield proportionally to bRUNE stakers.
bRUNE can be staked to earn claimable RUNE, or set to auto-compound, buying & staking more bRUNE automatically.
TCY
Stake TCY and earn 10% of THORChain revenue distributed in RUNE once every 24 hours.
Users can chose the TCY AutoCompounder built by AutoRujira to passively grow their TCY holdings by automating the reinvestment of rewards. Rewards are sent directly to the smart contract which converts the RUNE into more TCY via RUJI Trade and redistributes it to depositors — compounding their position over time.
Users opting for the auto-compound option receive sTCY, a liquid representation of their share in the strategy that can be redeemed for TCY at any time.
Indexes
yRUNE (The Yield Bearing RUNE Index)
yRUNE combines RUNE (~80%) and TCY (~20%) into one asset using RUJI Index's vault infrastructure. It is the first liquid RUNE based asset that also captures yield from THORChain system income. With RUJI Index's rebalancing engine, yRUNE constantly rebalances the underlying RUNE and TCY to capture price swings and market inefficiencies while taking advantage of TCY generated fees.
Deposit into yRUNE are always made from RUNE, and redemption always to RUNE.
yTCY (The Yield Bearing TCY Index)
yTCY combines TCY (~80%) and RUNE (~20%) into one asset using RUJI Index's vault infrastructure. It is designed to track the performance of both RUNE and TCY, with a strategic overweight on TCY to maximize yield potential. With RUJI Index's rebalancing engine, yTCY constantly rebalances the underlying TCY and RUNE to capture price swings and market inefficiencies while taking advantage of TCY generated fees.
Deposit into yTCY are always made from TCY, and redemption always to TCY.
RJI (Rujira Index)
The Rujira Index (RJI) is a basket of tokens native to THORChain that tracks the performance of the App Layer economy. It currently comprises 5 components (RUNE, RUJI, TCY, LQDY and AUTO, with more to be added as the ecosystem growth) combined into one asset using RUJI Index's vault infrastructure. It is intended to capture Rujira ecosystem growth as a whole. The index does not auto-rebalance; therefore, it is designed to continuously overweight the top performers and underweight the underperformers.
Deposit into RJI are always made from USDC, and redemption always to USDC.
FAQ
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