Intermediate4 min read

How to Backtest a Pool

Use the backtest tool to see how a pool performed with different settings.

Key Takeaways

  • The backtest tool uses real historical data to simulate your returns
  • Test different range widths and rebalance delays to find what works best
  • Check multiple time periods (30, 90, 365 days) for robust settings

What is Backtesting?

Backtesting means running a strategy against real historical data. You see what would have happened if you had deposited in the past.

It answers the question: "How much would I have earned in this pool with these settings?"

How to Use the Backtest Tool

  1. Go to snuggle.fi/backtest
  2. Select a pool (e.g., WETH/USDC 0.30%)
  3. Choose a time period (30, 90, or 365 days)
  4. Set a deposit amount
  5. Adjust range width and rebalance delay
  6. Click "Run Backtest"

The tool calculates your returns using real trading data from that period.

Reading the Results

The backtest shows you:

Total Return: Your percentage gain or loss over the period. This includes trading fees earned minus impermanent loss.

Fees Earned: Total trading fees your position would have earned.

Number of Rebalances: How many times Snuggle would have rebalanced your position.

Comparison to HODL: How your returns compare to simply holding the tokens.

Finding the Best Settings

Try different combinations:

Range Width: Start wide (10%) and narrow it down. Watch how returns change. Narrower ranges earn more fees but rebalance more often.

Rebalance Delay: Try 1 hour, 4 hours, and 8 hours. Longer delays mean fewer rebalances but more time out of range.

The sweet spot is where fees are high but rebalances are not too frequent.

Check Multiple Time Periods

A setting that worked great in a bull market might not work in a sideways market. Test across multiple periods:

  • 30 days: Recent performance
  • 90 days: Medium-term trend
  • 365 days: Full cycle including ups and downs

Settings that perform well across all three periods are the most reliable.

What You Learned

  • The backtest tool simulates returns using real historical data
  • Adjust range width and rebalance delay to find optimal settings
  • Test across multiple time periods for the most reliable results
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Frequently Asked Questions

Is backtesting free?
Yes. The backtest tool at snuggle.fi/backtest is free to use. No wallet connection needed.
How far back does the data go?
Up to 365 days of real historical data, depending on how long the pool has existed.
Should I always pick the highest-returning settings?
Not necessarily. Settings that worked best in one period may not work best in another. Look at multiple time periods and pick settings that perform well across different market conditions.

See how much you could earn.

Run a Backtest

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How to Backtest a Pool | Learn | Snuggle