Losses by Band Range

Overview

The amount of crvUSD that a user can mint is determined by the number of price bands that their collateral is distributed over. When collateral is distributed over a smaller amount of price bands, it allows the user to mint more crvUSD. However, this means that the user will incur larger losses through soft liquidations.

The Losses by Band Range indicator tracks the distribution of losses over time based on the number of bands that are in a position.

How can I use it?

By tracking the historical losses incurred based on a position’s band range, users can determine their position strategy based on their risk profile. As can be seen in the chart above, most losses occur in positions with a band range of 5 or less or with 48. Users that are aiming to be capital efficient, might choose a smaller amount of bands but keeping in mind that they will need to actively manage their position. Users who want to mint crvUSD but reduce loss exposure through soft liquidations will likely want to choose band ranges 10 and above.