SLAC Explained

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The Question vTVL Didn't Answer

In our last post, we explained how your capital can serve multiple strategies through virtual balance accounting.

But here's what we didn't quantify: How much liquidity does your capital actually provide to the market?

If you have $100k and it serves 5 strategies, the market sees $500k of available liquidity.

That 5x multiplier? That's your SLAC.

What Is SLAC?

SLAC (Shared Liquidity Amplification Coefficient) is simple:

SLAC = (Total notional liquidity provisioned) / (Your actual capital)

Example:

• You have $100k in your wallet
• You approve 5 strategies to use it
• Each strategy shows $100k available liquidity
• Total liquidity to market: $500k
• SLAC = 5x

The higher your SLAC, the more liquidity you're providing per dollar of capital.

The Two Components of SLAC

According to 1inch's research, SLAC comes from multiplying two factors:

SLAC = Leverage × Strategy Sharing

Component 1: Leverage

Using borrowed capital to amplify your position.

Example:

• You have $100k USDC
• Deposit in Aave as collateral
• Borrow $200k more stablecoins
• Now you have $300k to deploy
• Leverage: 3x

Component 2: Strategy Sharing

Same capital serving multiple strategies.

Example:

• Your $300k (from leverage)
• Approve 3 strategies to use it
• Each sees $300k available
• Total notional: $900k
• Sharing: 3x

Combined SLAC = 3x leverage × 3x sharing = 9x

This is from 1inch's whitepaper example: $100k equity becomes $900k notional liquidity.

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Aqua0's Approach: Sharing Without Leverage

We focus exclusively on strategy sharing across chains.

Why no leverage?

Leverage adds risk:

• Liquidation risk if prices move against you
• Borrowing costs eat into returns
• Complexity in managing debt positions

We believe most LPs want efficiency without additional risk.

Our model:

• You deploy $100k (no borrowing, no leverage)
• Approve 5-8 strategies across multiple chains
• SLAC: 5-8x (purely from sharing)

You're providing 5-8x the liquidity to the market with zero leverage risk.

Real Example: Aqua0 SLAC in Action

Your position:

• Capital: $100k USDC + ETH in your wallet
• Approved strategies: 6

Strategies:

1. Uniswap V3 on Base
2. Curve on Ethereum
3. Aerodrome on Base
4. Balancer on Arbitrum
5. Velodrome on Optimism
6. Pancakeswap on BSC

Math:

• Each strategy can access your full $100k
• Total notional liquidity: $600k
• SLAC = 6x

What this means:

• Traders on Base see $100k available liquidity (from you)
• Traders on Ethereum see $100k available liquidity (from you)
• Traders on Arbitrum see $100k available liquidity (from you)
• All at the same time

You deployed $100k. The market sees $600k.

Why SLAC Matters: The Fee Multiplier

Higher SLAC = more fees earned.

Traditional LP (SLAC 1x):

• $100k in one Uniswap pool
• Pool active 10% of time
• Earning fees 10% of time
• ~5-8% APY

Aqua0 LP (SLAC 6x):

• $100k serving 6 strategies
• At least one strategy active most of the time
• Earning fees 60-80% of time
• ~15-25% APY

Why? Because you're capturing opportunities across:

• Multiple chains (when Base is hot, you're there)
• Multiple protocols (when Curve has volume, you're there)
• Multiple time zones (US morning → EU afternoon → Asia evening)

Your capital is where the action is, whenever the action happens.

The Practical Limits

1inch's research shows SLAC caps around 10x due to:

1. Coordination overhead - More strategies = more complexity
2. Timing conflicts - If 3 strategies need capital simultaneously, you can only serve one
3. Gas costs - Moving capital frequently eats into profits

Aqua0 targets SLAC 5-8x because:

• 5-8 strategies is optimal for cross-chain coordination
• Diminishing returns beyond 8x
• Sweet spot between efficiency and manageability

Can You Add Leverage?

Yes, if you want higher SLAC.

Example:

• Your $100k equity
• 2x leverage via Aave → $200k total
• Share across 5 strategies
• SLAC = 2x × 5x = 10x

But remember: leverage adds risk. You're now managing:

• Liquidation thresholds
• Borrowing costs
• Debt positions

We don't promote leverage. But Aqua0 is composable with money markets if you choose to use them.

SLAC vs Volume-to-TVL Ratio

SLAC measures liquidity multiplication (how much liquidity you provide).

Volume-to-TVL measures capital efficiency (how much trading volume you facilitate).

Both are related:

• Higher SLAC → more strategies served → more volume captured → higher ratio

We'll explore Volume-to-TVL in our next post.

The Bottom Line

SLAC quantifies your capital's productivity.

Traditional AMM:

• $100k deployed
• Serves 1 pool
• SLAC = 1x
• Market sees $100k liquidity

Aqua0:

• $100k deployed
• Serves 6 strategies across 4 chains
• SLAC = 6x
• Market sees $600k liquidity

Same capital. 6x the market impact. 3-5x the fees.

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Read next: Volume-to-TVL Ratio: Why Efficiency Beats Size →

Previous: What is vTVL? ←

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