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A backtest was conducted covering the period from December 10, 2024 to April 1, 2025, using the WETH/USDC .05% Uniswap v3 pool on Ethereum Mainnet. The benchmark strategy—a passive liquidity provision approach—incurred an estimated 28% capital loss over this timeframe. In contrast, our Protocol Owned Liquidity (POL) model experienced a notably lower drawdown of only 11%, despite being only minimally tuned. Liquidity provisioning fees were accounted for in the backtest of both the benchmark and the POL strategy.
Furthermore, the POL strategy achieved consistently higher liquidity depth than the benchmark. This was measured by dividing the mean amount of liquidity (as defined by Uniswap v3) set by the strategy by the amount of liquidity in the benchmark position.
