Pool Parameter

When creating a Pool, the creator sets specific parameters to dictate its operation. Once these parameters are established, they cannot be altered. There are five critical parameters to understand

Target Market

• Purpose: Specifies the liquidity market of the Pool.

• Details: This determines the Underlying Index and Settlement Token for the Pool. Each Pool provides liquidity for 72 bins per pair of Underlying Index and Settlement Tokens. As such, only the designated Settlement Token can be deposited into the Pool.

Bin Allocation Ratio

• Purpose: Designates how liquidity is distributed across bins.

• Details: This parameter determines the percentage of total liquidity that will be channeled to each bin.

Settlement Token Ratio

• Purpose: Maintains a specified Settlement Token reserve within the Pool.

• Details: Defines the percentage of Settlement Token the Pool must retain at all times.

Rebalancing Period

• Purpose: Ensures the Pool's cash holdings align with the predetermined Settlement Token Ratio periodically.

• Details: If the proportion of settlement tokens in the Pool deviates from the defined Settlement Token Ratio, a rebalancing is initiated by the keeper at pre-set intervals.

Rebalancing Threshold

• Purpose: Regulates and optimizes the rebalancing process.

• Details: This parameter establishes the rebalancing threshold. For instance, if the cash ratio is targeted at 50% and the threshold parameter is 5%, then rebalancing will be bypassed if the settlement token ratio remains within the 45% to 55% range, thereby averting any unnecessary rebalancing.