Vault Strategy - Auto Rebalancing and Compounding

How does the CLMM LP Optimizer Vault Strategy work?

  • User deposits SUI into the vault

  • The vault’s strategy auto-swaps some SUI to USDC; basis the current target LP provisioning range

  • The vault constantly monitors the price of the underlying pair and a rebalance is triggered if the price moves beyond a certain % (called the Reset Range)

  • When the Reset Range is triggered, the vault rebalances it’s underlying Cetus LP position with new price ranges (called the Target LP Range). Every vault has a predefined Target LP range and a Reset Range

  • Periodically, the yield earned via swap fee and reward emissions will be converted to SUI and reinvested into the underlying LP pool basis the latest asset ratio

  • It is important to note that - on top of improving capital efficiency (lower IL) via active management of the LP position, the vault also gives users the benefits of auto-compounding

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