> For the complete documentation index, see [llms.txt](https://samurai-cipher-token.gitbook.io/samurai-cipher-token-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://samurai-cipher-token.gitbook.io/samurai-cipher-token-docs/the-liquidity-pools-strategy.md). # The Liquidity pools strategy The strategy is designed to generate stable cash flow by providing liquidity in various blockchain ecosystems and generating commission income from users' trading activity. This area is one of the fundamental elements of the Samurai Cipher Token investment model, as it combines a relatively low level of risk, regular income generation and the ability to gradually increase positions in promising digital assets. The main sources of profitability are: * Trading commissions of liquidity pools. Rewards for liquidity providers (LP Rewards). * Additional protocol incentive programs. * Growth in the value of the underlying assets. #### Strategy Architecture Below is a structural diagram of the strategy, Figure 3.
**Figure 3 - Structural diagram of the Liquidity pools strategy** The Liquidity Pools strategy is divided into two complementary strategies: **Conservative** strategy and **Active** strategy. Each strategy uses its own set of liquidity pools and performs a separate function within the Samurai Cipher Token ecosystem. #### Allocation of investment capital The scheme of distribution of investment capital by strategies and ecosystems is shown in Figure 3.1.
**Figure 3.1 - Diagrams of the distribution of investment capital** All funds allocated to the Liquidity pools strategy are distributed as follows:
StrategyShare of capital
Conservative strategy70%
Active strategy30%
The main objective of a **Conservative Strategy** is to generate stable commission income, while an **Active Strategy** focuses on accumulating assets with higher growth potential. #### Conservative strategy The strategy is designed to generate stable income from commissions and minimize the risks of Impermanent losses. 70% of the capital of the Liquidity Pools category is allocated for this area. The strategy covers four blockchain ecosystems: Ethereum, Solana, Sui, Plasma. Funds for ecosystems are distributed as follows:
EcosystemLiquidity pools
EthereumUSDT / USDC, WETH / ETH
SolanaUSDT / USDC, jitoSOL / SOL
SuisuiUSDT / USDC, xSUI / SUI
PlasmasUSDe / aUSDT0, xUSD / tcUSDT0
The main goal is to receive stable commission income with minimal volatility. The strategy combines income from commissions and additional returns from liquid staking assets. #### Active strategy The active strategy is designed to accumulate high-potential assets and participate in the growth of promising blockchain ecosystems. 30% of the capital of the Liquidity Pools category is allocated for this area. Unlike the Conservative Strategy, this direction uses more volatile trading pairs that can provide additional profitability in the face of market growth.
EcosystemLiquidity pools
EthereumETH / USDT
SolanaSOL / USDT
SuiSUI / USDT
PlasmaXPL / USDT
#### The mechanics of the growth of the Liquidity pools strategy One of the key features of the Samurai Cipher Token's Liquidity Pools” model is the mechanism for gradually redistributing returns between strategies. At the initial stage, the Conservative Strategy receives the bulk of the capital (70%), while the Active Strategy receives a smaller share of the capital (30%). All commission income earned by a Conservative Strategy is initially allocated to a special Treasury of the Liquidity Pools category. After receiving the commission income, the funds are converted into the underlying assets of the respective ecosystems.: Ethereum, Solana, Sui, Plasma. The received assets are then used to increase the volume of the Active Strategy. This process continues until the total asset value of Conservative and Active Strategies becomes equal. In this way, a gradual redistribution of capital is achieved from a more stable part of the portfolio to a more profitable one without the need to attract additional financing. #### Mechanics after achieving balance. After the cost of Conservative and Active Strategies becomes comparable (50/50), the income distribution model changes. All subsequent commission income is distributed as follows:
Business directionRevenue share
Global Treasury Samurai Cipher Token80%
Liquidity Pools Treasury20%
The funds remaining within the **Liquidity pools strategy** are evenly distributed between Conservative and Active Strategies to support further portfolio growth. #### Profit generation The profitability of the Liquidity Pools category is formed by: * Trading commissions. * Remuneration of liquidity providers. * Protocol incentive programs. * Growth in the value of the underlying assets. * Accumulation of liquid staking tokens. * Increasing the asset value of an Active Strategy. #### Profit sharing After achieving the target balance between the strategies, the net profit is distributed as follows: 80% is sent to the Global Treasury Samurai Cipher Token to finance the further development of the ecosystem, 20% remains within the Liquidity Pools category and is used to further increase the volume of assets under management. #### The goal of the Liquidity Pools strategy The Liquidity Pools strategy is designed to create a stable and predictable cash flow within the Samurai Cipher Token ecosystem. Using a two-tier capital management model allows you to simultaneously: * Receive stable commission income. * Reduce the risks of non - permanent losses. * Gradually increase exposure to promising digital assets. * To form additional capital for the development of the ecosystem. * Ensure the long-term financial stability of Samurai Cipher Token. This strategy is one of the key elements of the project's investment model and ensures constant replenishment of the treasury through activities in the decentralized finance sector. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://samurai-cipher-token.gitbook.io/samurai-cipher-token-docs/the-liquidity-pools-strategy.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.