Tracker
Always earn fees with automated rebalancing
Always earn fees with automated rebalancing
With the Tracker strategy, your position will never go out of range. This is the "vanilla" rebalancing strategy on Kamino.
Liquidity providers simply identify a percentage range above and below the current price. While in range, the position will earn auto-compounded fees. If the price reaches the specified range, a rebalance will trigger, ensuring that the position always remains in range and earning fees (and DEX incentives if available).
When a rebalance is triggered, the vault follows the standard rebalancing procedure:
Identifying a new range based on the selected parameters
Swapping funds at the new ratio, and redepositing into the vault
Note that rebalancing realizes any impermanent loss incurred up to that moment
After rebalancing, your position will continue to earn auto-compounded fees.
The tracker strategy prioritizes earning trading fees at all times. The premise of the Tracker strategy is that trading fees will outweigh the impact that rebalancing and impermanent loss will have on a position over time.
A tracker is often suitable for ranging markets and/or token pairs that LPs expect to not deviate significantly in price correlation. This is especially effective on pairs with high trading volume.
You are bullish on both ETH & SOL and expect them to move up in price at a similar rate.
You want to stay in a tight range for a volatile pair and maximize trading fee capture.
