Market Making

Capital: $200,000

Orders:
├── Lend $100,000 @ 8.5% for 90 days
└── Borrow $100,000 @ 7.5% for 90 days

Spread: 100bps
Max profit (full utilization): $1,000/quarter = 2% on capital

Bullish on rates (expect rates to rise):
├── Lend $150,000 @ 8.5% (larger, expect fills)
└── Borrow $50,000 @ 7.0% (smaller, harder to fill)

Bearish on rates (expect rates to fall):
├── Lend $50,000 @ 9.0% (smaller, harder to fill)
└── Borrow $150,000 @ 7.5% (larger, expect fills)

30-day market:
├── Lend @ 7.5%
└── Borrow @ 6.5%
Spread: 100bps

90-day market:
├── Lend @ 8.5%
└── Borrow @ 7.5%
Spread: 100bps

180-day market:
├── Lend @ 9.0%
└── Borrow @ 8.0%
Spread: 100bps

Normal volatility:
  Spread: 50-75bps

High volatility:
  Spread: 100-150bps (compensate for risk)

Low volatility:
  Spread: 25-50bps (compete for flow)

Starting:
├── Lend order: $100,000 @ 8.5%
└── Borrow order: $100,000 @ 7.5%

After fills:
├── Lend filled: $80,000 (you're lending $80k)
└── Borrow filled: $30,000 (you borrowed $30k)
Imbalance: Net lending $50,000

Rebalance options:
1. Cancel remaining lend order, post more borrow
2. Adjust rates to attract borrow fills
3. Accept the imbalance as directional bet

Example Limits:
├── Max net exposure: $500,000 either direction
├── Max single maturity: 40% of total
└── Max utilization: 80% of capital

Exit triggers:
├── Spread compression to <20bps
├── Market move >100bps against position
└── Liquidity drops below threshold

Capital deployed: $500,000
Strategy: Symmetric spread at 75bps
Average utilization: 70%
Period: 1 year

Calculation:
  Utilized capital: $500,000 × 70% = $350,000
  Spread captured: 0.75%
  Gross profit: $350,000 × 0.75% = $2,625

  Protocol fee (0.1% of interest): ~$200
  Net profit: ~$2,425

  ROI on total capital: 0.49%
  ROI on utilized capital: 0.69%

import { Centuari } from '@centuari/sdk';

const client = new Centuari({ chainId: 42161 });

// Post both sides
await Promise.all([
  client.lend({
    asset: 'USDC',
    amount: '100000',
    rate: 0.085,
    maturity: '90d'
  }),
  client.borrow({
    collateral: { asset: 'USDC', amount: '125000' },
    borrowAsset: 'USDC',
    amount: '100000',
    rate: 0.075,
    maturity: '90d'
  })
]);