Market Modes — All You Need to Know (Part 4)

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The last article in the A51 Market Modes series is about the Static Mode. If you haven’t come across the previous articles in the series, here they are:

  1. Bull Mode
  2. Bear Mode
  3. Dynamic Mode

Let’s see what this feature is, how, and why would you use it.

What is Static Mode?

Static mode doesn’t reposition your liquidity due to market volatility. It remains within the ticks or ranges whether the prices increase or decrease.

Why would you choose it?

Static mode is best for:

  1. Stable pairs with very narrow strategies like USDC/DAI.
  2. The tokens that have very minimal price movement due to their tokenomics nature.

This is a safe strategy if you don’t want to face any permanent loss and are creating the strategy for the long term without worrying about automatic adjustments based on price changes.

⚙️Here’s how it works:

Static mode works like traditional AMMs:

  • You deposit assets into a specific price range.
  • The current price of one of the assets increases and moves to the right side of the liquidity graph.
  • Your liquidity position will not trail the new price and will remain where it was initially deposited.
Static mode in action

So, regardless of what happens with the prices, the liquidity position will remain static.

💭A thing to remember:

Static mode might not use capital as efficiently as other modes because it doesn’t react to price changes. But it still gives you opportunities to use the static mode according to your goals and strategies.

Concluding the series:

The series on A51’s market modes ends here. Concluding what we learned from it below:

The market mode selection is based entirely on your market knowledge and back-testing from pair to pair.

The markets keep changing so the preferences are also bound to change. That’s where the strategy editing feature in the app comes in handy.

Through this feature, you can change the market mode and other preferences, like if the market is now bullish, you can change the strategy from Bear to Bull, or you can also choose to change the mode to Static if the market is too volatile to move the liquidity around.

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A51 Finance | Previously Unipilot

'Remote Control' for your liquidity positions offering a superior UI to use underlying AMMs.