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Key Concepts: Liquidity, Islands

Introduction to Liquidity and Islands on Kodiak​

Kodiak introduces Islands, automated liquidity management vaults designed to optimize V3 liquidity provision. These vaults simplify the process, ensuring your assets consistently earn returns by keeping your liquidity in optimal price ranges.

AquaBera Islands: Elevating Liquidity Management​

AquaBera enhances the traditional Island concept by adding directional liquidity management. Unlike standard Islands, AquaBera Islands know your deposit asset and actively work to avoid over-selling, benefiting all liquidity providers.

How Kodiak Islands Operate​

When you deposit liquidity into a Kodiak Island:

  • Automated Management: Islands use predefined rules to keep your liquidity in the best price ranges, ensuring continuous fee generation.
  • Minting Island Tokens: You receive Kodiak Island tokens, representing your share of the underlying V3 position.
  • Versatile Usage: These tokens can be staked in Sweetened Islands for additional rewards, used in other DeFi applications on Berachain, or burned to redeem your liquidity and earned fees.

AquaBera Islands: Advanced Benefits​

AquaBera Islands offer all the advantages of traditional Kodiak Islands, with added benefits:

  • Directional Liquidity: AquaBera aligns liquidity with market movements, reducing the risk of over-selling and boosting returns. This approach benefits Validators, $BGT Holders & Farmers, and Ecosystem Projects.
  • Automated Strategies: AquaBera’s automation keeps your liquidity in-range without manual intervention, maximizing earnings with minimal effort.
  • Sweetened Islands Integration: AquaBera Islands can be staked in Sweetened Islands or other locking contracts, earning more rewards by locking liquidity.
  • Gauge Incentives: AquaBera Islands are eligible for Berachain gauges, directing $BGT emissions to your vault and enhancing rewards for all participants.

AquaBera Islands represent a strategic advancement in liquidity management, offering powerful tools and incentives to maximize your assets in the Kodiak and Berachain ecosystems.

For more on setting up and managing AquaBera Islands, visit our Creating and Managing Liquidity Pools guide.