ICHI
ICHI is a liquidity management protocol engineered to mitigate the inefficiencies, risk, complexities, and the disincentives inherent in traditional decentralized finance (DeFi) liquidity provision.
Utilizing Single-Sided Concentrated Liquidity Pools, ICHI transforms, simplifies, and automates liquidity management across various Automated Market Makers (AMMs) including Pearl. ICHI addresses key challenges for liquidity providers such as dual-token deposit complexity, impermanent loss, and the need for manual management. By optimizing liquidity provision—the cornerstone of success in DeFi—ICHI ensures that each dollar supplied is utilized to its fullest potential. This innovation offers an accessible, efficient solution for liquidity providers, DeFi projects, and individual investors, helping them to maximize yields while minimizing risks within the DeFi ecosystem.
Features:
✅ Single Token Deposit
✅ Automated Liquidity Management
✅ Optimized risk management for fee generation
Single-Sided Vaults on Pearl
There are currently six active ICHI single-sided vaults deployed on top of liquidity pools on Pearl.
| VAULT | DEPOSIT TOKEN | EST. WITHDRAWAL BALANCE |
|---|---|---|
arcUSD-UKRE | arcUSD | 80/20, arcUSD/UKRE |
USTB-MORE | USTB | 80/20, USTB/MORE |
USTB-PEARL | USTB | 80/20, USTB/PEARL |
reETH-RWA | reETH | 80/20, reETH/RWA |
CVR-PEARL | CVR | 60/40, CVR/PEARL |
USDC-PEARL | USDC | 80/20, USDC/PEARL |
We'll use the USTB - PEARL pool as an example for how they operate.
Users deposit 100% USTB into the single-sided deposit vault.
The vault places the USTB in a concentrated position just below the current price of PEARL
By trading within the LP position, the USTB is converted to a target of an approximate 80/20 USTB/PEARL composition
These vaults work to help mitigate the loss from impermanent loss. However, deposited liquidity is still in an active LP position and IL cannot be fully eliminated.
When the depositor withdrawals the position it should be around 80% USTB and 20% PEARL.
Vault Parameters
Every ICHI vault on Pearl is set-up with preconfigured parameters managing how the vault operates under periods of normal liquidity functions and periods of high volatility.
The following are the key settings and definitions managing ICHI vault operations:
Base Concentration (Deposit): Concentration for base position whenever the vault has either too many or a healthy amount of deposit token
Limit Concentration (Paired): Concentration for limit position whenever the vault has too few deposit tokens in under-inventory
High Price Volatility: Approx. one hour change in pool price beyond pre-configured threshold, triggering defensive mode
Defensive Mode: Triggered by high volatility, sreads out liquidity to protects assets
Over Inventory: Inventory threshold signifying too much of the deposit token
Healthy: Inventory threshold signifying the correct balance of tokens in the vault
Under Inventory: Inventory threshold signifying too little of the deposit token
Rebalances in ICHI vaults are fully automatic based on parameters for logic settings above. When liquidity actions trip the automation system, it rebalances.
If the vault crosses from Healthy to Over or Under, it rebalances. Or if high volatility is triggered, the vault will rebalance into defensive
During periods of extreme volatility, the vault rebalances into a defensive position and actually locks from further deposits (but not withdrawals.) At this point, manual intervention is required.
For more information on vault operations and graphics that provide a good visual representation, check out the ICHI docs.
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