# LP & Rebalance Simulator Training

%[https://vimeo.com/1232138432/904c19810a] 

### Feature Quick-Reference:

*   **Entry Cost Modeling:** See exactly what platform fees, swap fees, and slippage cost you before your LP position even goes live.
    
*   **LP Value Curve:** Visualize how your position value moves at every price point across your range — and what happens when price exits it.
    
*   **Break-Even Timeline:** Calculate how many days of fees it takes to cover your entry costs and reach a genuine no-loss position.
    
*   **Rebalance Simulator:** Compare your rebalanced position against the "do nothing" scenario to reveal the permanent loss locked in by every rebalance.
    

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### Core Mechanics

The **LP & Rebalance Simulator** is built around one uncomfortable truth: every rebalance has a price. The tool quantifies that price in days and dollars instead of gut feel.

Set up a position with three inputs — current price, deposit size, and a price range — then layer on expected APR, platform fees, swap fees, and slippage. The calculator immediately shows:

*   **Entry Cost:** On a $1,000 USDC deposit at 75% APR with a 0.4% platform fee, 0.05% swap fee and 0.1% slippage, your position opens at roughly **$995** — you start ~0.5% down before the first swap.
    
*   **Position Composition:** It calculates your starting split (~46% ETH / 54% USDC at the geometric midpoint) so you know exactly what you're holding.
    
*   **Fee Recovery Time:** It takes just **3 days** of in-range fees to cover the cost of entering the LP.
    

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### The LP Curve: Capped Upside, Unlimited Downside

The value curve is the tool's most revealing output. On a $2,400 ETH entry with a $2,000–$2,800 range:

*   Price falls to the lower bound → LP worth **$872 (down 12.3%)**.
    
*   Price rallies to the upper bound → LP worth **$1,031 (up 3.7%)**.
    
*   Below the range you hold 100% ETH, and the curve goes linear — every dollar of ETH downside hits your position 1:1.
    

This is the core LP trade-off: **upside is capped, downside is unlimited** — unless time and fees bail you out. Over **60 days** at 75% APR the position earns roughly **$122 in fees**, enough to bring a price at the lower bound back to break-even — and push an out-of-range-to-the-upside exit to **+16%**. The table shows the exact number: **63 days** in range to reach a no-loss position at 75% APR.

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### The Rebalance Math: What a Rebalance Actually Costs

This is where the calculator earns its keep. Simulate price dropping to **$1,800** — $200 below your $2,000 lower bound. You're now holding 100% ETH worth **$783**. Rebalancing to a new midpoint-based range 1,700 – 3,294 creates a wider, inherently bullish position:

*   New position opens **90% ETH / 10% USDC** — only a small ETH sale is required.
    
*   Wider range drops expected APR to ~**30%**.
    
*   It takes **11 days** of fees just to recover the swap, slippage, and platform fees of the rebalance.
    
*   It takes **75 days** in range to cover the fees **plus the losses locked in** by selling ETH low to fund the new position.
    

The rebalance cost table puts it in plain terms: even if price returns to the original entry, the rebalance itself cost **$47 of permanent loss**. If price returns into your original range within 75 days, rebalancing wasn't worth it — sitting on your hands would have beaten the rebalance.

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### Run Your Numbers

Use the **LiquidEdge LP & Rebalance Simulator** to stress-test your own positions:

1.  Set your current price, deposit, and expected APR with realistic fee assumptions.
    
2.  Study the LP curve at the lower and upper bounds — know your downside before you enter.
    
3.  Model a midpoint and a single-sided rebalance on the same out-of-range scenario, and compare the days-to-recovery and permanent loss side by side.
    
4.  Pair your range bias with the **Market Bias Indicator** to enter with the least downside.
    

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Access the **LiquidEdge Rebalance Calculator** at: [liquidedge.app/tools/lp-rebalance-simulator](https://www.liquidedge.app/tools/lp-rebalance-simulator)