H20 Docs
  • H20
  • On-chain Token Economy Management
  • Non-Negotiables
  • Getting Started
  • Token Lifecycles & H20 Services
    • Token Lifecycles & H20 Services
      • Pre-Launch Phase
      • Post-Launch Phase
        • Treasury Establishment & Management
        • On-chain OTC
        • Peg Management
        • Buybacks
        • Liquidations
        • Trading
      • Vesting Phase
        • Managing Token Unlocks
      • Consolidating and Maturing Phase
        • Sustainable Self-Custody Market-Making
  • STRATEGIES
    • Auction-based DCA
    • Fixed Grid
    • Recharging Grid
    • Dynamic Spread (Single sided)
    • Dynamic Spread (Double sided)
    • Dynamic Spread (Fast or Slow Exits)
  • Case Studies
    • Profitable Market-making With Correlated Token Pairs
    • Profitable Market-making with Uncorrelated Token Pairs
    • Managing Inflation From Token Vesting
    • Turn Low Volume into High Growth with H20
    • Bootstrap Your Token with H20
    • Bring CEX-Style Trading On-Chain with H20
    • Stabilize Your Token Peg with H20
    • Capture Value from Price Run-Ups with H20
    • Transform Downtrends into Sustainable Liquidity Growth with H20
  • Security & Risk Management
    • Security Model
    • Risk Management
  • Reporting
    • Reporting
      • Example Reports
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On this page
  • How It Works
  • Key Benefits
  • Ideal Use Cases
  • Technical Parameters
  1. STRATEGIES

Dynamic Spread (Single sided)

Single-Sided Dynamic Spread is an automated market making strategy that starts with tokens deployed on one side only, and establishes two-way liquidity after initial accumulation through exponential price auctions.

How It Works

  1. Begins with token-only deposits and establishes reserves through trading

  2. Uses exponential price auctions to discover and adapt to market prices

  3. Tracks weighted average prices to ensure profitable rotations

  4. Transitions from accumulation to balanced market making over time

Key Benefits

  • Capital Efficiency: Start market making with just tokens; no need for both assets upfront

  • Continuous Two-Way Liquidity: Establishes balanced liquidity through trading

  • Market Adaptability: Adjusts to trends while protecting against adverse movements

  • Opportunity Capture: Can benefit from price appreciation during the accumulation phase

Ideal Use Cases

  • When lacking stable reserves but wanting to provide liquidity

  • In situations requiring capital efficiency

  • With tokens that have natural price appreciation expectations

  • Projects looking to bootstrap liquidity without significant stable reserves

Technical Parameters

  • Initial token allocation

  • Target spread parameters

  • Auction curve settings

  • Cost basis tracking preferences

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Last updated 24 days ago