Aloe

Aloe is an autonomous liquidity allocation protocol for Uniswap V3. It helps passive liquidity providers get the benefits of concentrated liquidity, and rewards stakers for predictions.

From a liquidity provider’s perspective, it’ll make V3 feel like V2 — they’ll deposit to Aloe at some specified price point and receive ERC20 tokens representing their portion of the pool.

Behind the scenes, liquidity is managed by stakers. Anyone can become a staker, and their job is to submit proposals. A proposal is a normal distribution (mean & standard deviation) that characterizes the price range in which the staker believes trading will take place over the next hour. To measure confidence in those beliefs, each staker locks in some stake, denominated in our utility token, ALOE.

Once everyone has had a chance to submit proposals, Aloe combines them into a global position and rebalances the pool’s liquidity accordingly. After an hour, real trading volumes are compared to each staker’s proposal. This allows Aloe to redistribute staked tokens proportional to proposal accuracies. Basically, the most accurate staker will see their stake grow, while less accurate stakers will have their stake slashed. If you’re familiar with the Numerai competition, this is similar.