# Autonomous LP

Alloc8 automates **concentrated liquidity (CL)** so you don’t need to manually manage ranges and rebalances. CL can offer higher fee potential, but if the price moves **out of range**, your position may earn **no fees** until it is moved back in range.

#### What Alloc8 automates

**1) Range selection (ticks)**\
The **Agent** calculates the **lower and upper ticks** using pool conditions (price, TWAP, liquidity, volatility) and considers risk/gas constraints.

**2) Rebalancing (move to a new range)**\
When needed, the system can rebalance by adjusting your LP NFT position (mint/increase/decrease/collect/burn) through the **Position Manager**.

**3) Autocompound (scheduled)**\
Autocompound runs **every Sunday at 7:00 PM UTC**.

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### ZAPs (enter/exit from any token)

Alloc8 supports **ZAPs**, which lets you **enter or exit a position using a single token**, instead of supplying (or receiving) both pool tokens.

How it works (user view):

* You choose the token you want to deposit/withdraw.
* The ZAP route performs the needed swaps and liquidity steps automatically.

**Important:** Zap outputs are **estimates**, because swaps execute at live market prices - final amounts can vary slightly.

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### Slippage, price impact, and safety checks

Automation still needs guardrails. Alloc8 enforces on-chain policy checks via **GSPM**, including:

* **recipient pinning** (proceeds go only to your account/owner path),
* **per-transaction slippage bounds**,
* **rolling-window slippage budgets** (caps cumulative loss),
* **token/agent allowlists**, and
* pool ↔ oracle deviation limits.

Plain-language definitions:

* **Slippage**: price changes between quote and execution; if it moves too much, execution can fail and retry later.
* **Price impact**: your trade size moves the pool price; a high impact can cause a revert.

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### Dust (small leftover tokens)

During rebalances or Zap actions, small leftover amounts (“dust”) can happen due to rounding and swap execution. Dust is **not intended to be lost -** it typically remains as small token balances in your account flow and is returned back to your smart account. 

You can either utilise the Dust by depositing it back to existing position, or open a new position or withdraw to your EOA wallet.

Alloc8’s Position Manager includes **refunds for unused tokens** during mint/increase to prevent overpayment (a common source of dust handling).

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### Fees and gasless execution (what users should expect)

* Alloc8 charges a **10% performance fee** on **realized yield**, not on your deposit.
* This fee is collected during **rebalance** or **autocompound** events (Sunday 7:00 PM UTC).
* Rebalances/autocompounds are **gasless for users**: the protocol pays gas and subsidizes it from the performance fee.
* Rebalances typically trigger when **earned fees/yield > gas cost**. If gas is very high, smaller positions may rebalance less often and can show **out of range**. Recommended size: **$500+**.

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### Critical risks (don’t skip)

Alloc8 automation does not remove DeFi risks, including:

* **Impermanent loss (IL)**
* **Range risk** (out-of-range positions may stop earning fees)
* **Sudden volatility spikes** (rebalances may be delayed or skipped)
* **Smart contract risk** (Alloc8 + AMMs/routers + tokens)

Also note: **rebalancing can realize IL**, because it may involve swapping between tokens to restore target ratios.