General Guidelines
Start Small
- Begin with small position sizes when using a new market
- Familiarize yourself with how swaps, borrowing, and liquidity interact
- Scale positions gradually as you gain confidence
Understand the Market You Interact With
Before interacting with a market:- Review available liquidity
- Check the pool’s Collateral Factor (CF)
- Consider asset volatility and correlation
- Observe current utilization levels
Stay Informed
Recommended actions:- Follow official Omnipair communication channels
- Monitor protocol updates and parameter changes
- Participate in community discussions where relevant
Trading Best Practices
Slippage Awareness
Set appropriate slippage:- Small trades: 0.5-1% slippage
- Medium trades: 1-2% slippage
- Large trades: 2-5% slippage (or split into smaller trades)
- Always review price impact before confirming
- Be cautious in low-liquidity or volatile markets
Market Selection
Best Practices:- Prefer deeper markets for larger trades
- Be cautious when trading long-tail assets with limited liquidity
- Avoid trading during extreme volatility unless intentional
Liquidity Provision Best Practices
Choosing Markets
When providing liquidity, consider:- Historical trading activity
- Borrowing demand (which drives interest accrual)
- Asset volatility and correlation
- Your desired risk and exposure duration
Managing LP Positions
What to Monitor:- Pool utilization
- Fee and interest accumulation
- Changes in pool composition
- Avoid over-allocating to a single market
- Reassess positions as utilization changes
- Prefer markets where both swap and borrowing demand exist
Understanding Impermanent Loss
What to Expect:- IL occurs when asset prices diverge
- More pronounced in volatile or uncorrelated pairs
- Choose more correlated assets where possible
- Consider shorter LP durations in volatile markets
- IL is partially offset through combined swap fees and borrowing interest
Borrowing Best Practices
Collateral Management
Best Practices:- Avoid borrowing at maximum capacity
- Maintain a healthy buffer above minimum requirements
- Monitor collateral value relative to borrowed assets
- Add collateral early rather than reacting late
- Reduce debt during periods of rising volatility
Utilization Awareness
What to Monitor:- Rising utilization increases interest rates
- High utilization can reduce withdrawal flexibility
- Monitor utilization trends before borrowing
- Repay or resize positions if utilization spikes
- Prefer borrowing in markets with balanced supply and demand
Leveraging Best Practices
Position Sizing
Best Practices:- Start with low leverage
- Increase exposure incrementally rather than in one loop
- Ensure you understand how recursion affects position size
Managing Positions
What to Monitor:- Borrowed amount relative to collateral
- Remaining collateral headroom
- Changes in market utilization
- Add collateral early instead of reacting near limits
- Repay portions of debt to reduce exposure
- Gradually unwind positions rather than exiting in a single transaction
Adjusting and Exiting Positions
Plan Ahead:- Define conditions under which you will reduce or close leverage
- Avoid adjusting positions during extreme volatility
- Be aware that higher utilization can affect execution when unwinding
- Close leverage incrementally where possible
- Monitor pool conditions before large adjustments
- Keep sufficient liquidity available to repay borrowed assets
Security and Interaction Safety
Wallet Security
Best Practices:- Use reputable Solana wallets
- Secure private keys and recovery phrases
- Avoid interacting with unverified links
Transaction Review
Always Verify:- Token pairs and amounts
- Slippage settings
- Expected outputs before confirmation
- Pause before signing any transaction
- Reject transactions that do not match your intent
Common Mistakes to Avoid
Overextending Positions
Avoid:- Maxing out borrowing or leverage capacity
- Assuming all markets behave similarly
- Ignoring pool-specific market dynamics
Reactive Decision-Making
Best Practices:- Plan position sizes and exit paths in advance
- Avoid emotional responses to short-term price movement