Automatic Liquidity
Last updated
Last updated
Nightshade’s Automatic Liquidity feature allows you to provide concentrated, on-chain liquidity on any trading pair with a custom distribution. Instead of passively spreading your assets across all prices (as in a typical AMM pool), you can “perfectly” concentrate your tokens at specific price levels for maximum capital efficiency . In essence, Nightshade lets you buy low and sell high on autopilot – capturing profits on each market swing. The new interface (found under the Swap page’s Liquidity tab) streamlines this process by letting you create up to 18 automatic liquidity orders in one go (previously, each had to be placed individually).
We have created a variety of presets to get you started, select any preset you like and click “Customize” to tweak any settings. https://nightshade.finance/liquidity
Buy Low, Sell High (Flipping Orders): An Automatic Liquidity order is a special limit order that “flips” after execution. For example, if you set a buy order at a certain price, as soon as it’s filled the system will automatically place a corresponding sell order at a higher price (according to your chosen spread) using the purchased tokens . Likewise, if a sell order fills, a buy order is opened with the proceeds. This means your liquidity keeps cycling indefinitely – buying low and then selling high – until you cancel the orders . Each completed buy→sell or sell→buy cycle nets you a profit defined by the spread you set.
Profit Spread: You define a spread percentage for your liquidity strategy. This is the price difference between each buy and its paired sell order (and vice versa) that you want to capture as profit . For instance, a 5% spread will aim to “pocket” about a 5% profit on every round trip (every time the price drops and rises by 5% and your orders execute) . A smaller spread will trigger more frequently but at lower profit per trade, while a larger spread yields higher per-trade profit but requires bigger price moves.
Multiple Orders & Custom Liquidity Curve: Instead of placing one order at a time, Nightshade allows you to deploy multiple flip orders at once to build a custom liquidity curve across a range of prices . You can set up to 18 orders in one transaction, distributed above and below a chosen price point. This creates a grid of buy and sell orders – effectively a tailored liquidity pool that matches your strategy. You have full control over how these orders are distributed: the new interface provides several bonding curve options (Linear, Exponential, Sigmoid, Quadratic) to shape the size/spacing of your orders across the range (explained in detail below).
Concentrated vs Pool Liquidity: Unlike a traditional AMM liquidity pool (which spreads your tokens across every possible price, leading to capital inefficiency and risk of impermanent loss), Nightshade’s automatic liquidity concentrates your tokens at specific prices you choose . This means you can target where you think liquidity is needed or where you expect to profit from volatility. You might, for example, cluster orders around a support level or evenly span a price range – it’s up to you. Because your orders sit on Nightshade’s order book, they only execute when a counterparty trades against them, and they flip to the opposite side to continually provide liquidity (and earn fees/spread profit) over time.
No Instant Execution: When setting up automatic liquidity, your initial orders must be placed away from the current market price – i.e. your buys go below the current price and sells above it. This ensures you’re providing liquidity rather than taking an immediate trade. (In fact, Nightshade will not create an automatic liquidity order at a price that would match instantly with the market .) Essentially, you’re positioning orders such that the market has to move to hit them, rather than executing immediately.
Continuous & Cancellable: Your flip orders will continue to operate indefinitely (executing and re-placing themselves as described) until you cancel them . You retain control and can withdraw your liquidity at any time, unless you’ve chosen to lock the orders for a period. Cancelling an order will stop that particular liquidity position from flipping further. You could cancel all or some of your orders if you need to adjust your strategy or retrieve your tokens.
Optional Locking: The interface includes a “Lock For” option that allows you to lock your liquidity orders for a fixed duration (e.g. 1 week, 1 month, 1 year) . If you lock an order, it cannot be cancelled by you until the lock period expires. This is mainly intended for project owners or long-term providers who want to guarantee liquidity stays in the market for that time (for example, to assure a fair launch with liquidity that can’t vanish immediately) . For normal users, you will typically leave this as “None” (no lock) so that you have the flexibility to cancel at any time.
Open the Liquidity Form: Navigate to the Swap Page on Nightshade and switch to the Liquidity tab. (If you came from a token’s page and clicked “Liquidity,” the token pair will be pre-selected.) https://nightshade.finance/swap?swapType=liquidity
Configure Your Price Range: Enter the price boundaries for your automatic liquidity strategy:
Min Price: The lowest price in your range. This is the minimum price at which your buy order(s) will be placed. The system won’t place orders below this price. (Ensure the Min Price is below the current market price so your buy orders don’t fill instantly — this way the full amount can flip for profit.)
Max Price: The highest price in your range. This is the upper limit for placing liquidity. The system won’t place new buy orders above this price. If the market rises above Max Price, your strategy will pause new flips until the price drops back into range.
Enter Order Amounts: Specify how much of each token to allocate:
Buy Amount: The total amount of quote currency (e.g. USDC) you want to use to buy the base token at or above the Min Price. This determines how large your buy order(s) will be in total.
Sell Amount: The total amount of the base token (e.g. ALPH) you plan to sell at or below the Max Price. This should correspond to the amount you’re willing to flip into the quote currency when prices rise.
(Tip: Ensure you have sufficient balances for both Buy and Sell amounts. You’ll need enough of the quote asset for the buy orders, and enough of the base asset if you are placing any initial sell orders.)
Set the Profit Percentage: Choose your Profit % (spread) for each flip. This percentage is how much higher the sell price will be relative to the buy price for each order. For example, a 5% profit means each time your buy order executes, Nightshade will automatically place a corresponding sell order 5% above that buy price. Every completed buy→sell cycle yields roughly a 5% gain (minus any trading fees).
Choose a Liquidity Distribution Curve (Advanced): If available, select a Bonding Curve (distribution type) for multiple orders between your Min and Max prices. Options may include:
Linear: Evenly distribute liquidity across the range (equal-sized orders at regular price intervals).
Exponential: Concentrate more liquidity near one end of the range (e.g. more buy orders closer to Min Price, tapering off towards Max).
Sigmoid/Other curves: Specialized distributions that concentrate liquidity in the middle or according to a specific formula.
(If you’re unsure, Linear is a good default for balanced coverage.)
Optional – Set a Lock Time: You can lock the automatic liquidity order for a preset duration (e.g. 1 hour, 1 day, 1 week). Locking prevents you from canceling the order until the chosen time has elapsed. This is useful if you must provide liquidity for a period (for example, project owners during a fair launch) to avoid removing liquidity early. (If you don’t need this, leave it unlocked so you retain the flexibility to cancel or adjust.)
Review and Place Your Order: Double-check all inputs and the summary of your automatic liquidity setup. The interface will often display a preview of your orders (prices and amounts) and expected outcomes. Ensure the configuration matches your intent (correct range, amounts, and profit percent). When ready, click “Place Order”.
Confirm the Transaction: Sign the transaction in your Alephium wallet to deploy the automatic liquidity orders on-chain. Once confirmed, your liquidity strategy is active.
Monitor and Manage: After activation, Nightshade will automatically buy low and sell high according to your parameters:
Your flip orders run indefinitely – whenever a buy order fills, a sell order is opened at the profit % target, and vice versa, cycling continuously.
You can cancel the automatic liquidity order at any time from your active orders list (unless it’s locked, in which case you must wait for the lock period to end). Canceling stops the strategy and releases any remaining tokens back to your wallet.
If the market moves outside your set Min/Max range, the system will simply not place new orders outside those bounds. You may choose to adjust the range or create new positions if market conditions change significantly.
Start Small and Learn: If you’re new to automatic liquidity, begin with a modest amount. This lets you observe how the system behaves (buys, flips, sells) without taking on too much risk. You can always scale up once you’re comfortable with the mechanics.
Choose a Smart Price Range: Set your Min–Max range based on realistic market expectations. A range that’s too broad might spread your liquidity thin, while a very narrow range could mean your orders flip frequently but stop if price leaves the range. Aim to cover the typical volatility of the token without going to extreme highs or lows that are unlikely to hit.
Set a Reasonable Profit %: Pick a profit percentage that balances frequency and reward. A lower profit % (e.g. 1-2%) will trigger more often in a volatile market but yields smaller gains each cycle (and must cover trading fees). A higher profit % (e.g. 5-10%) means each flip nets more per trade, but your orders may take longer to fill (or might not fill at all if the market doesn’t swing that far). Many users start around 1-5% and adjust based on market activity.
Use Appropriate Order Sizes: Your Buy Amount and Sell Amount should reflect how much you’re willing to trade in each cycle. Remember that if all your buy orders execute, you’ll need the equivalent Sell Amount of tokens to flip, and vice versa. It’s often wise not to commit your entire balance at once – keep some reserves in case you want to adjust or if the market moves sharply.
Optional Locking – Use with Caution: Locking your liquidity can promote a stable market (no sudden removal of liquidity), which is great for supporting a token launch or low-liquidity asset. However, only lock if you’re confident you won’t need those funds for the duration. For most users just farming gains, leaving orders unlocked is safer so you can respond to market changes or emergencies.
