Maverick Phase II: Liquidity Shaping with Boosted Positions
Since Maverick’s mainnet launch on Ethereum, we’ve seen outstanding capital efficiency performance data, followed by a steady and strong growth in TVL. Maverick has already supported over $1bn in trading volume and hit number 3 on DefiLlama’s ranking of top DEXes on Ethereum by 24-hr volume within the first month of launch. In mid-April, Maverick AMM was shipped to zkSync Era as Maverick’s first L2 expansion. The capital efficiency ratio on that chain has been around 100% since launch.
With many liquidity pools on Maverick enjoying the highest capital efficiency in the market and Maverick Liquidity Providers (LPs) earning higher trading fees organically, the initial launch has proved to the world the raw power of Maverick AMM.
However, this is only the beginning of a revolution in capital efficiency.
To help web3 protocols incentivize liquidity more efficiently and accurately and to provide LPs with even more opportunities to put their capital to work, we are now launching the next phase of Maverick: liquidity shaping with Maverick Boosted Positions.
What is a Boosted Position?
Maverick introduces a powerful new way to direct liquidity incentives through Boosted Positions.
Boosted Positions expand on the utility of Maverick AMM’s already highly-configurable liquidity positions. A Boosted Position works just like any other liquidity position in Maverick AMM: it can be started in any pool using one of the three movement modes or using a customized distribution in Mode Static. But Boosted Positions benefit from two new features:
- Other LPs can find Boosted Positions on Maverick and add their own liquidity to them
- Boosted Positions can be incentivized with additional token rewards that will be distributed among LPs in that Boosted Position
Boosted Positions represent a powerful new way for users to attract liquidity to a token pair by adding incentives in very precise ways. Users can incentivize a Boosted Position with supported tokens and select a timeframe for their distribution. LPs who add liquidity to a Boosted Position will split the incentives added to that position pro-rata, and thus can earn extra rewards on top of any trading fees generated by that Boosted Position.
Why do we need Boosted Positions?
Problem: Existing AMMs are highly inefficient with incentives
Protocols regularly incentivize the liquidity in AMMs in order to create depth for certain token pairs. However, existing AMMs do not provide them with the means to incentivize token pairs efficiently. Instead, incentives are distributed evenly across an entire pool, meaning that LPs are rewarded for providing liquidity that is never used.
Even worse, this unfocused approach to incentives can actually work against a protocol’s needs. For example, both liquid staking tokens and stablecoins have an interest in maintaining a certain price peg within a liquidity pool. If market events should cause that peg to slip, existing incentive mechanisms are counterproductive, since they reward users for bringing two assets to a pool. Increasing the reserves of both tokens in a pair is unhelpful in these situations, since it will not help to restore peg–and can actually increase support for the new, undesirable price.
Solution: Maverick Boosted Positions enable “surgical” liquidity incentivization
Since Maverick’s liquidity positions are highly configurable, a Boosted Position can be used to direct and shape liquidity in very precise ways, rather than just offering incentives across a whole pool. Projects and other users will be able to use Boosted Positions to guide liquidity to exactly where it’s needed, maximizing the efficiency of their incentives.
For example, a project interested in maintaining a peg (e.g., for a stablecoin or liquid staking token) could create a Boosted Position consisting of a single bin of a counter asset (e.g., ETH) just below the peg price in their pool. Adding incentives to this Boosted Position would attract users to add more ETH to this particular bin only, effectively creating a wall of liquidity that would help protect the peg from any sell pressure.
This represents a more efficient option than existing incentive designs, which usually only reward blanket liquidity and cannot be tuned with this level of precision.
Of course, this is only one example of a liquid shaping strategy enabled by Boosted Positions. The flexibility of Maverick AMM’s liquidity modes and customizable distributions opens up a wide field of opportunities for users to explore.
How do I use Boosted Positions?
Protocols and other users interested in using Boosted Positions to shape liquidity in Maverick’s pools can find them under Add Liquidity in the dApp’s top menu. This will take you to the Boosted Positions page, where you can explore existing Boosted Positions or create a new one.
If you want to add incentives to a Boosted Position, simply choose Engage in the top menu and then click Incentivize. This will take you to the Incentivize page, where you can choose which Boosted Position to incentivize. For more detailed instructions on all of these activities, please see our docs.
LPs can use the Boosted Positions page to explore the Boosted Positions currently available on Maverick, including the projected APR based on fees and token incentives. Joining a Boosted Position is as simple as clicking on it and adding liquidity.
LPs in Boosted Positions can claim incentive rewards at any time from the Portfolio page. If you have a share of a Boosted Position, you will see a Claim Rewards button on the position card in your portfolio.
Across the dApp’s UI, Boosted Positions are marked with a lightning bolt to differentiate them from regular liquidity positions. If you see the lightning bolt, you know you’re looking at a Boosted Position!
What does this mean for our community?
Protocols and DAO Treasuries
Protocols and DAO treasuries can not only enjoy high capital-efficiency by deploying pools on Maverick, but also create Boosted Positions in their pool and incentivize these positions with any token.
By allowing users to incentivize any Boosted Position (with any liquidity movement mode and liquidity distribution), Maverick unlocks a new degree of accuracy and efficiency for directing and shaping AMM liquidity.
Liquidity Providers
Liquidity providers on Maverick can now enjoy extra incentives by adding liquidity to Boosted Positions on Maverick.
Learn more about Maverick:
About Maverick
Maverick Protocol is a new infrastructure for decentralized finance, built to enable higher capital efficiency and greater capital control for traders, liquidity providers, DAO treasuries, and developers, powered by a revolutionary Automated Market Maker (AMM).
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