analyzing-liquidity-pools

Analyzing Liquidity Pools

Overview

Analyze DEX liquidity pools to understand TVL, trading volume, fee income, and impermanent loss risk. Compare pools across protocols (Uniswap, Curve, Balancer) and chains to identify optimal LP opportunities.

Prerequisites

Before using this skill, ensure you have:

• Python 3.8+ installed
• Internet access for subgraph/API queries
• Understanding of liquidity providing concepts (IL, fee tiers, TVL)

Instructions

Step 1: Analyze a Specific Pool

Analyze pool by address:

python {baseDir}/scripts/pool_analyzer.py --pool 0x88e6a0c2ddd26feeb64f039a2c41296fcb3f5640

Analyze by token pair:

python {baseDir}/scripts/pool_analyzer.py --pair ETH/USDC --protocol uniswap-v3

Step 2: Calculate Impermanent Loss

Calculate IL for a price change:

python {baseDir}/scripts/pool_analyzer.py --il-calc --entry-price 2000 --current-price 3000

Project IL for various scenarios:

python {baseDir}/scripts/pool_analyzer.py --il-scenarios --token-pair ETH/USDC

Step 3: Estimate LP Returns

Calculate fee APR:

python {baseDir}/scripts/pool_analyzer.py --pool [address] --detailed

Project returns for position size:

python {baseDir}/scripts/pool_analyzer.py --pool [address] --position 10000

Step 4: Compare Pools

Compare same pair across protocols:

python {baseDir}/scripts/pool_analyzer.py --compare --pair ETH/USDC --protocols uniswap-v3,curve,balancer

Compare fee tiers:

python {baseDir}/scripts/pool_analyzer.py --compare --pair ETH/USDC --fee-tiers 0.05,0.30,1.00

Step 5: Export Results

Export to JSON:

python {baseDir}/scripts/pool_analyzer.py --pool [address] --format json --output pool_analysis.json

Export comparison to CSV:

python {baseDir}/scripts/pool_analyzer.py --compare --pair ETH/USDC --format csv --output pools.csv

Output

Pool Analysis Summary

==============================================================================
  LIQUIDITY POOL ANALYZER                           2026-01-15 15:30 UTC
==============================================================================

  POOL: USDC/WETH (Uniswap V3 - 0.05%)
------------------------------------------------------------------------------
  Chain:          Ethereum
  TVL:            $500.5M
  24h Volume:     $125.3M
  Fee Tier:       0.05%

  FEE METRICS
------------------------------------------------------------------------------
  24h Fees:       $62,650
  Fee APR:        4.57%
  Volume/TVL:     0.25

  TOKEN COMPOSITION
------------------------------------------------------------------------------
  USDC:           $252.1M (50.4%)
  WETH:           $248.4M (49.6%)
  Current Price:  $2,450/ETH
==============================================================================

Impermanent Loss Report

  IMPERMANENT LOSS CALCULATION
------------------------------------------------------------------------------
  Entry Price:    $2,000/ETH
  Current Price:  $3,000/ETH
  Price Change:   +50%

  IL (%)          -5.72%
  IL ($1000 LP):  -$57.20

  Value if HODL:  $1,250.00
  Value in LP:    $1,192.80

  BREAKEVEN ANALYSIS (0.05% fee tier)
------------------------------------------------------------------------------
  Daily Fees:     $0.63 (at $500M TVL, $125M vol)
  Days to Break:  91 days
  Monthly Fees:   $18.90
==============================================================================

Error Handling

See {baseDir}/references/errors.md for comprehensive error handling.

Common issues:

• Pool not found: Verify address and chain
• Subgraph timeout: Uses cached data with warning
• Invalid pair: Check supported protocols

Examples

See {baseDir}/references/examples.md for detailed usage examples.

Quick Examples

Analyze top ETH/USDC pool:

python pool_analyzer.py --pair ETH/USDC --protocol uniswap-v3 --chain ethereum

Calculate IL for 2x price increase:

python pool_analyzer.py --il-calc --entry-price 100 --current-price 200

Compare Uniswap fee tiers:

python pool_analyzer.py --compare --pair ETH/USDC --fee-tiers 0.05,0.30,1.00

Export all ETH pairs:

python pool_analyzer.py --token ETH --format json --output eth_pools.json

Configuration

Settings in {baseDir}/config/settings.yaml:

• Default chain: Primary chain to query
• Cache TTL: How long to cache subgraph data
• Subgraph endpoints: URLs for each protocol
• Fee tier defaults: Common fee tier options

Resources

• The Graph: https://thegraph.com/ - Subgraph queries
• Uniswap Info: https://info.uniswap.org/ - Pool explorer
• DeFiLlama: https://defillama.com/ - TVL data
• Impermanent Loss Calculator: https://dailydefi.org/tools/impermanent-loss-calculator/