As a web3 protocol, you know the importance of liquidity for your protocol’s token markets on Uniswap. Without adequate liquidity, your token’s markets can be volatile and unappealing to potential investors. That’s where Steer Protocol comes in.
What is Steer Protocol?
Steer Protocol is the first concentrated liquidity market maker to allow for multiple positions within a single market-making strategy vault. This means that Steer Protocol can apply liquidity in any capital allocation curve a developer creates, such as a normalized curve within a given price range.
How does Steer Protocol work?
Steer Protocol provides the ability for web3 protocols to create market-making strategies and incentivized vaults that they can use to bootstrap liquidity into market-making strategies around their token. Protocols can either build their own strategies or use a no-code interface to utilize an existing strategy within the Steer dApp Store.
The Challenge of Bootstrapping Initial Liquidity
One of the challenges that many web3 protocols face is the difficulty of bootstrapping initial liquidity for their token markets on Uniswap V3. This is due to a lack of resources and products which allow protocols to self-launch incentivized vaults for their market-making strategies. Without adequate liquidity, these markets can be volatile and unappealing to potential users. This can make it difficult for web3 protocols to achieve the market capitalization and interest that they desire.
How Incentivization Can Help
One way to overcome the challenge of bootstrapping initial liquidity is through incentivization. By offering rewards to liquidity providers who contribute to your token’s markets, you can attract more liquidity and improve the overall health of your markets. This can help your protocol’s token achieve higher market capitalization and reduce the overall slippage users might incur when doing swaps.
Steer Protocol’s Incentivized Vaults
Steer Protocol offers a unique solution to help solve the bootstrapping problem. Through Steer Protocol’s staking interface, all strategies and their related vaults can be incentivized by any ERC-20 token. This allows both protocols as well as communities to incentivize liquidity when launching an initial liquidity pool or when incentivizing liquidity migrations on various L2s such as Polygon, Optimism, or Arbitrum.
The Benefits of Using Steer Protocol
There are several benefits to using Steer Protocol for your protocol’s liquidity needs:
One of the biggest advantages of using the Steer Protocol is the improved liquidity it provides for your token’s markets. With Steer’s incentivized vaults, you can easily bootstrap liquidity and create more stable markets for your token.
Customized Market-Making Strategies
Steer Protocol provides the ability to customize your market-making strategies. You can create your own strategies or use existing ones from the Steer dApp Store to suit your specific liquidity needs. This allows you to tailor your market-making approach to your protocol’s unique characteristics and goals.
No Code Interface
Not a developer? Not a problem! Utilize Steer Protocol’s no-code interface! Protocols can view all strategies available through Steer Protocol’s dApp marketplace. Once a suitable strategy has been found, protocols can easily clone the liquidity strategy for their own token markets. Pro tip: This can be very helpful when setting up multiple pools!
In conclusion, using Steer Protocol for your protocol’s liquidity needs can provide several benefits, including improved liquidity, customizable market-making strategies, and incentivized vaults. If you want to optimize the liquidity of your protocol’s token markets on Uniswap, consider using Steer Protocol.