Public Pools FAQ

Why is there no impermanent loss?

Market makers have the ability to rebalance public pools in order to:
  • prevent impermanent loss for LPs
  • hedge / counter-trade effectively
The way market makers do this is by moving funds from Hashflow Pools to their CeFi venue and vice versa such that their net AUM across all venues remains constant.

What are the risks?

The primary risk for an LP is contributing assets to a public pool run by a market maker whose pricing algorithm fails to be profitable or becomes insolvent.
If market makers can price assets off-chain, there is also a risk that they submit a favorable quote to an insider. In other words, they could self-deal, leaving LPs unable to withdraw their assets.
We’re addressing these risks by only working with market makers that have a proven track record in CeFi.

Why is there a deposit limit?

Each pool has an asset capacity determined by the market makers. Once this capacity is reached, users will not be able to make additional deposits until the capacity is raised. This was imposed in order to more efficiently manage the capital to generate better yields for the LPs.

Why is there a withdrawal limit?

Public Pools currently have a weekly withdrawal limit of 10% for each asset, which means that withdrawals cannot exceed 10% of the asset’s max capacity each week. This limit was imposed in order to:
  1. 1.
    Prevent bank runs
  2. 2.
    Discourage users from continuously moving assets in and out of the pools
  3. 3.
    Allow market makers to more effectively manage the inventory
When does the withdrawal limit reset?
The withdrawal limit resets every 7 days. The exact timing of the reset is different for each pool, and the remaining time until reset is shown for each pool within the app.

How are the APYs calculated?

Each APY consists of two components:
  1. 1.
    Base APY: The base yield of the pool.
  2. 2.
    HFT APY: The LP rewards earned in the form of HFT, our governance token. This is calculated based on an estimated token price for HFT, the rate of the reward emissions, and the current level of deposits in the pool.

Are the APYs guaranteed?

No, the APYs shown on Hashflow will change based on:
  • The current level of deposits in the pool
  • The weight of the pool according to the LP rewards scheme
  • The estimated price of HFT

Can I create my own liquidity pool on Hashflow?

Hashflow public pools currently operate on a proof-of-reputation model, where only market makers with a proven record are currently allowed to operate these pools. Our goal is to move away from the proof-of-reputation model to one where public pools are evaluated and ranked via governance. Over time, market makers will develop reputations on-chain based on their performance, and Hashflow governance stakeholders will be able to assign them scores by which LPs can make educated decisions.
That said, if you are interested in market making a public or a private pool, please reach out to us at [email protected].

Who is currently market making on Hashflow?

Our current market makers include GSR, LedgerPrime, and Kronos, with more to come.