CLP Vaults · Canonic Docs

Overview

CLP is a supplementary vault that pools base token and quote token liquidity, then deploys it into MAOB via an algorithmic strategy. It is designed for users who want to support protocol liquidity.

How it works for LPs

Deposit base tokens and quote tokens to receive CLP shares.
Inventory-aware liquidity provisioning is done automatically. 50:50 base to quote TVL is targeted.
Withdrawals are instant.
To prevent abuse, a withdrawal fee of 0.1% (0.01% for stables) is applied and distributed proportionately amongst remaining liquidity providers.

Canonic’s core market is the MAOB order book. Market makers can provide liquidity directly on MAOB or via a CLP vault that deploys on their behalf. Direct MAOB placement is the most precise and capital‑efficient path.

Choose your market and inventory mix

Pick a base token/quote token pair you can hedge or carry inventory in.
Hold both base tokens and quote tokens so you can quote on both sides.
Decide a target inventory skew (neutral, long base tokens, or long quote tokens).

Build a rung ladder

MAOB uses discrete rungs around the oracle midpoint. A typical ladder:

Places tighter liquidity near the midpoint for higher fill probability.
Places wider liquidity farther out for adverse selection protection.
Splits size across multiple rungs to smooth fills.

Suggested starting shape:

3–5 rungs per side
more size near the midpoint, less size further out
symmetric for neutral inventory, skewed if you want to lean directional

Manage inventory risk

Market making on Canonic is primarily about inventory control:

If you accumulate base tokens, shift liquidity toward sells (asks) and widen buys (bids).
If you accumulate quote tokens, do the opposite.
Use external hedges or cross‑venue rebalancing if you need a tight inventory band.

Requote cadence

MAOB does not require continuous cancels, but you should still adjust:

When the oracle midpoint moves materially.
When your inventory drifts outside your target band.
When your rung distribution becomes unbalanced from fills.

Claim and recycle

Fills accumulate as claimable balances. Market makers should:

Claim regularly to keep available balances fresh.
Recycle proceeds into new rung orders to maintain depth.
Withdraw only when you need to rebalance off‑chain.

Control price impact and toxic flow

Use wider rungs for size to reduce adverse selection.
Place tighter rungs only where you are comfortable being hit.
Monitor oracle freshness; stale or jumpy oracles can lead to poor fills.

Operational checklist

Track oracle health and staleness windows.
Monitor fill rates by rung and side.
Watch wallet balances for base tokens and quote tokens drift.
Keep enough gas reserves for timely adjustments.

Vault‑based market making

If you operate a CLP vault, the same strategy applies, but you deploy through the operator:

The operator batches placements and claims on behalf of LPs.
You can still run a rung ladder strategy, but with shared pool inventory.
Withdrawals may force cancellations, so keep liquidity buffers available.