Position Manager Report

General
1

Overview

On December 12 2023, the Kitchen requested an allocation of 20,000 CAKE to streamline the onboarding process for Position Manager vaults across the BNB Chain, Ethereum, Arbitrum, Base, and zkSync Era. This initiative aims to enhance the management of liquidity positions for users, thereby supporting the growth of PancakeSwap’s ecosystem.

We will share insights into the CAKE allocation, assess the performance of Position Managers, and outline our strategic direction for the future.

CAKE Allocation

As of 8 Feb, the Kitchen has allocated 14,989 CAKE incentives on all Position Manager vaults.

The allocation is distributed as follows:

Chain No. of Vaults Total CAKE
BNB Chain 15 9,660
Ethereum 6 2,439
zkSync Era 3 1,880
Arbitrum 1 505
Base 1 505

Position Managers Performance

Since the launch of Position Manager in late October 2023, our community has shown strong support for the vaults, leading to ~$750M in trading volume and gaining TVL of ~$6.5M. Despite these achievements, it’s important to note:

  1. The CAKE allocation has not significantly boosted overall trading volume and TVL on PancakeSwap beyond our benchmark levels.

  2. The performance of Position Manager vaults in helping users manage their liquidity position has been moderate, indicating potential room for improvement.

These insights are essential for fine-tuning our approach and ensuring any CAKE incentives align with our long-term objectives of adding value to our users and enhancing our CAKE tokenomics.

Future Plans

We’ll continue to evaluate the vaults’ performance and work closely with the strategy managers to enhance the product for our users. Moving forward, we will work towards the following:

  1. CAKE Incentivization: We will reduce CAKE incentives for Position Manager vaults on core pairs (e.g., BNB-USDT, ETH-USDC) across all chains. For non-core pairs (e.g., rETH-ETH, swETH-ETH), incentives will be assessed on a case-by-case basis to ensure they contribute to PancakeSwap’s long-term value.

  2. Impermanent Loss-adjusted performance metrics: Implement IL-adjusted performance metrics on the respective Position Managers’ frontends, enabling users to make a more informed decision before staking.

  3. Position Manager as veCAKE gauges: Integrate Position Manager vaults into our veCAKE ecosystem by the end of February, enhancing user experience and allowing sustainable CAKE incentivization.

  4. Expanding Utilization: Collaborate with partner protocols to onboard liquidity onto Position Manager vaults, allowing direct CAKE incentives through either bribing or veCAKE lock-up strategies.

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