Trader Joe CLMM Model: How ReHold Maximizes Returns and Generates 220% APR

Blockchain technology has gone through different revolutionary phases right from the inception of Bitcoin and Ethereum as the pioneers of digital payment. The blockchain industry continues to show endless ideas, with decentralized finance (DeFi) becoming a central figure of blockchain technology.

Decentralized finance (DeFi) aimed to bridge the gap between traditional finance systems with users through the provision of yield farming, lending and borrowing, and flash loans with the help of smart contracts to automate all of its processes eliminating complex policies that have affected traditional financial systems.

Decentralized finance has led to innovative blockchain technologies like decentralized exchanges where users interact with liquidity pools, swap tokens, and liquidity provision (Liquidity providers) and earn yields in the form of transaction fees, all with the help of smart contract algorithms.

A decentralized exchange (DEX) is a peer-to-peer marketplace built with smart contracts where users trade different digital assets without needing a third party to facilitate the funds.

Compared with traditional financial systems, DEX platforms are open-sourced and transparent, as all processes are automated between users, liquidity pools, and liquidity providers.

With their liquidity contribution, decentralized exchanges like Trader Joe's are a huge addition to the DeFi space. ReHold protocol leverage on Trader Joe’s concentrated liquidity to enable its users to earn as high as 220% APR from staking their crypto assets within a short period.

This article will discuss Trader Joe CLMM (Concentrated liquidity market makers), Trader Joe’s benefits, how to leverage ReHold protocol to earn up to 220% high APR in DeFi, and risks in concentrated liquidity market making.

Understanding the Concept of Concentrated Liquidity Market Makers

Concentrated liquidity market maker (CLMM) is a new generational liquidity model derived from the traditional automated market maker (AMM) that focuses liquidity within a specified price range to maximize capital while providing better yield for liquidity providers and seamless user trading opportunities.

CLMMs focus on providing better and improved strategies for the problems AMMs face, such as higher slippages in the bid to front-run prices when trading and impermanent losses from the volatility of crypto assets.

Concentrated liquidity models provide solutions to traditional liquidity provision; this provides opportunities for liquidity providers to have individualized price curves, improved capital management, encouragement of portfolio diversification, and more liquidity pools for traders to interact with.

The DeFi space, for a long time, has relied on the traditional AMM model as token liquidity spreads to infinity, leaving capitals not to be properly used and liquidity providers earning less than what they ought to earn and, in some cases suffering impermanent loss due to price impact or volatility. Let us discuss some key advantages of the CLMM model over traditional AMM models.

Advantages of CLMM Over AMM Models

• Concentrated liquidity market makers (CLMMs) provide deeper liquidity and spreads within certain price ranges as compared to AMMs model of zero to infinity price range
• CLMM model provides traders and liquidity providers the opportunity to create individualized price curves to earn higher APR in DeFi up to 220%
• CLMM strategy reduces high slippages and impermanent losses associated with DeFi trading

The CLMM model provides liquidity providers (LPs) many opportunities to earn more, but LPs need to stay active, adjusting price ranges to earn more. The model for CLMM has been designed to favour when prices are constantly being adjusted and monitored to ensure it is within its price range. When the price of an asset is outside its price range of liquidity provision, the LPs stop earning transaction fees within that certain period of price outside its specified price range.

Source: https://support.traderjoexyz.com/en/articles/6707938-liquidity-strategies

ReHold protocol leverages the enormous advantages of concentrated liquidity DEXs such as Trader Joe, Uniswap V3, QuickSwap, PancakeSwap, and others to aggregate the best prices for users and offer a dual investment staking plan to allow users to earn as high as 220% APR within a short period of 12 to 24 hours.

The ReHold and Trader Joe Integration

Trader Joe is a decentralized exchange (DEX) built on the Avalanche blockchain that offers users a wide range of services such as lending and borrowing, yield farming, staking, and launchpads. Key features of Trader Joe include low gas fees and superior processing speed.

Trader Joe's innovative blockchain solution employs the concentrated liquidity model known as a liquidity book, which allows liquidity providers to provide liquidity within a specified price range as an order book. This model allows LPs to earn more from Trade Joe’s fees while contributing to different liquidity pools.

By providing concentrated liquidity in Trader Joe’s liquidity pools (LPs), ReHold makes more yields. The protocol allocates user assets into a predetermined price range of the pool curve, collects all transaction fees paid by traders using Trader Joe’s concentrated liquidity within that range, and then returns user assets and their yields to the users.

Due to the unique ReHold algorithm, concentrated liquidity on Trader Joe may be used so well.

With this model in place, DeFi protocols like ReHold can easily integrate with such models to provide its users high yield APR of up to 220% with different tradeable paired tokens on Trader Joe.

ReHold protocol is a smart contract algorithm technology built over concentrated liquidity DEXs like Uniswap V3, Trader Joe, QuickSwap, PancakeSwap, and others to enable its users to create short trading with its dual investment strategy and the possibility of earning high APR returns of up to 220% within a short period.

ReHold’s dual investment plan is a short staking opportunity with high APRs for tokens pairs like ETH/BTC, ETH/USDT, BTC/USDT, and AVAX/USDT depending on your strategy and the staking plan you want to explore.

APR (Annual percentage rate) is the cost-benefit associated with money borrowed or loaned, but in this case, this benefit is associated with crypto assets staked for a certain period. This APR is calculated below.

ReHold integrates with concentrated liquidity DEXs to provide mouth-watering APR for its users and ensures its strategy to maintain a return on investment in any market condition is not compromised.

Concentrated liquidity pools are susceptible to price-manipulation attempts is one of the challenges. Because liquidity is concentrated around a specific price range, market manipulation takes more money. To best tackle this challenge, ReHold integrates with oracles, multi-sig, and DEXs to provide extra protection for user funds while ensuring users earn high APR in DeFi. ReHold has gone higher to employ strategies for beginners and pro users to feel secure while trading in both bear and bull market conditions.

Conclusion

The risk in Concentrated Liquidity Market Making (CLMM) is minimal, and many such DEXs adopted this model compared to the regular traditional AMM model where LPs have been faced with limitations. The CLMM model allows LPs to maximize capital, earn better when liquidity is provided, and diversify portfolios to reduce impermanent losses associated with DeFi trading.

With the availability of concentrated liquidity pools in decentralized exchanges, the ReHold protocol integrates with these DEXs (Uniswap V3, Trader Joe, QuickSwap, PancakeSwap) to provide high yield APR gains of up to 220% on dual staking plans within 12 to 24 hours. Visit ReHold or app.rehold.io with your Metamask or Trust wallet to supercharge your DeFi earnings up to 220%.