JIT-Pilot is an EulerSwap liquidity pool rebalancing system which allows users to set up automated monitoring for their EulerSwap positions, and rebalance them. Our breakthrough innovation(special thanks to Fractal from Euler Labs for enabling us to think in this direction)—reimagines the process in which arbitrageurs capitalize on price discrepancies at the expense of liquidity providers, leading to Loss-Versus-Rebalancing (LVR) exploitation, JIT-Pilot harnesses arbitrage to benefit LPs, incentivizing trades that reduce debt and restore pool health. This flips a long-standing DeFi challenge into a powerful advantage, making JIT-Pilot a first-of-its-kind solution.
EulerSwap’s JIT liquidity pools combine an automated market maker (AMM) with Euler’s lending vaults, enabling LPs to provide deep liquidity (up to 50x more than traditional AMMs) with minimal capital while earning swap fees and lending yield. However, one-sided trades create debt that accrues interest and push the Loan-to-Value (LTV) ratio towards liquidation. Naive rebalancing to unwind debt can lock in impermanent loss, especially in volatile markets.
JIT-Pilot solves this by:
- Monitoring Smarts: JITpilot uses time-weighted metrics to mitigate the effects of volatile markets and prevent frequent rebalancing that could crystalize impermanent loss and increase gas costs.
- Arbitrage-Driven Rebalancing: Adjusts pool parameters to attract arbitrageurs, who trade debt assets back into the pool, thereby reducing liabilities for LPs without relying on complex and costly solutions like hedging or external debt-clearing swaps.
- EVC-friendly: JITpilot is designed to work with the EulerVaultConnector (EVC) to better integrate into the Euler ecosystem.
- Peace of mind: LPs set their own safety and target thresholds for rebalancing.
Check out the Demo Video and Presentation Video for a detailed walkthrough. Check math.md for Mathematical Models used.
First install foundry then run:
./install.sh./devland.sh JITpilotRebalanceScenarioIf all goes well, your RPC will be available on the standard http://127.0.0.1:8545 endpoint. It will print the logs pertaining to the EulerSwap pool rebalancing.
JITpilot.configureLp(address _lp, uint256 _hfMin, uint256 _hfDesired);To start monitoring your EulerSwap LP position, you need to call the configureLp function with the following parameters:
_lp: The address of your EulerSwap LP position._hfMin: The minimum health factor for your LP position._hfDesired: The desired health factor for your LP position.
JITpilot.updateMetrics(address _lp);This function will update the metrics for the given LP. It will calculate the time-weighted average of the health factor and yield, and trigger a rebalance if needed, or trigger the EulerSwap reparametrization to the original state once the desired health factor is reached.
This repository is built on top of euler-devland, which is a tool for testing EulerSwap scenarios. You can find more information about it here. You can craft different scenarios where rebalancing could be needed and test them with JITpilot.
The repository includes comprehensive unit and integration tests for the JITpilot contract using the Foundry testing framework.
test/JITpilot.t.sol: Comprehensive unit tests covering all contract functions with mocked dependenciestest/JITpilotCore.t.sol: Core functionality tests without complex mocking, focusing on basic contract operations
# Run all tests
forge testThe tests cover:
- Access Control: Owner-only functions, authorized caller management
- Configuration: LP setup, parameter validation, multiple LP management
- Metrics Calculation: Health factor and yield calculations, time-weighted averages
- Rebalancing Logic: Trigger conditions, status transitions, parameter calculations
- Edge Cases: Zero balances, missing controllers, different token decimals
- Fuzz Testing: Property-based testing for weight management and LP configuration