Auto-rebalance
Position ranges and management can be complex. Kamino takes care of it.
Security & Risk
Creator Vaults
Rebalancing Info
Automated Liquidity
Position ranges and management can be complex. Kamino takes care of it.
A vault's position range refers to the price range into which a Kamino vault deploys liquidity. These ranges can be complex to manage manually, and on certain vaults, the ideal range can be difficult to consistently determine for the everyday user.
The CLMM Dilemma
In a CLMM DEX, users have to manually select their deposit ranges. As long as their deposit remains in this price range, they earn yield.
However, when prices move, the balance of the assets in a position can change, and enough movement can push it beyond the selected range. When this happens, two problems arise:
Deposit no longer earns yield
Entire deposit must be withdrawn and redeposited into a new range to earn yield again, as ranges usually cannot be adjusted on CLMMs
Thus, there are two primary considerations in manually selecting a position range:
Ideally, the range should be tight enough to maximize yields, as tighter ranges = higher yield
The range should be wide enough to allow for price movements without the need to rebalance
This is a difficult balance to strike, and Kamino aims to automate this process.
The liquidity provider's ideal outcome is that rebalancing is never needed, as rebalancing usually implies impermanent loss being realized. However, given certain triggers, Kamino automatically shifts liquidity into a new price range.
Read more in the section.