Introducing BANANA Maximizer Vaults: A Robo-Manager for Your Liquidity
Previously delayed, now launching June 21st
Over the past year, one of the most requested utilities for the BANANA token is a way to continually gain interest without the need to manage resources on a daily basis. Other platforms offer ways for users to re-stake rewards without human intervention — why can’t this apply to ApeSwap’s offerings?
We’ve heard the community, and the best answer to this need is to rebuild the BANANA vaults. That’s why we’re launching BANANA Maximizer vaults: A robo-manager to help all Apes continue to build long-term gains in exchange for liquidity.
Creating a Better Solution with BANANA Maximizers
In the past, other decentralized finance platforms created BANANA-earning vaults based on protocol Liquidity Pools. Although these options offered strong APRs for LP holders, it created unnecessary pressure on the ApeSwap ecosystem by automatically dumping BANANA rewards to repurchase the underlying Liquidity Pool. In fact, BANANA earned from external vaults represent 20% of daily sell pressure, which creates unnecessary drag on the price.
Without equal buy pressure on BANANA token, the token price could continue to degrade over time. Moreover, partnering with another platform could be predatory to the ApeSwap ecosystem, as their vaults would increase the daily sell pressure. To ensure long-term positive growth for BANANA holders and the entire ApeSwap ecosystem, we’re launching a new product: BANANA Maximizers.
The goal of the new BANANA Maximizer vaults is not to create a revenue-generating product. Instead, our product allows Apes to manifest their own destiny. Vaults on other decentralized finance platforms can charge users nearly 5% in fees, including up to 4.5% in performance fees.
As an alternative, we’re integrating Chainlink Keepers’ smart contract automation service to routinely auto-compound staking rewards at greatly reduced fees for BANANA holders. BANANA Maximizers only charge 0.6% in fees thanks to Chainlink Keepers:
- A 0.1% withdrawal fee, which is standard across the DeFi space to discourage short-term staking and de-incentivize mercenary farming.
- A 0.5% performance fee, all of which is used to maintain the Chainlink Keepers Upkeep contract, helping ensure rewards are regularly auto-compounded for users staking in BANANA Maximizers.
How BANANA Maximizer Vaults Work
Like the BANANA Farms, joining a BANANA Maximizer vault starts by creating a Liquidity Pool. At launch, five BANANA Maximizer LPs will be available:
After the launch, ApeSwap will add two more BANANA Maximizers per day, for the next seven days. Once the deployment is complete, our protocol will offer a total of 20 Maximizers: the five launch pairs, and 15 more to be revealed on Twitter. Be sure to follow ApeSwap on Twitter to see which BANANA Maximizers will be next to launch!
Once LP tokens are created, users can stake them in their vault of choice. Like Farms, holders staked in vaults will earn rewards in BANANA, along with passive rewards from swap fees (which are always added to your underlying Liquidity Pool).
However, unlike Farms, BANANA Maximizers work more like a robo-manager for your rewards. The daily amount of BANANA earned from staking in the Maximizer will automatically be compounded into the single-asset BANANA vault. As a result, not only will the LP Tokens earn daily rewards from staking with the opportunity to grow in value as prices increase, but the BANANA tokens will also earn their own rewards on a daily basis.
The higher APY shown in BANANA Maximizers are a combination of the APY from the LP tokens, along with the compounding earned from automatically re-staking BANANAs daily. Alongside other recent additions, the entire ApeSwap community gains more utility for BANANA, which in turn creates a stronger and more robust ecosystem.
Are There Risks to Staking in Maximizer Vaults?
As recent history has shown, there are inherent risks to staking liquidity anywhere. Backing assets in any opportunity has risks, past performance isn’t always an indicator of future returns, and any LP token may lose value over time.
In addition, LP tokens can be subject to “Impermanent Loss.” That is: If the price of the tokens offset too much from one another, LP holders could own a lesser return compared to staking each token separately. To reduce the risk of impermanent loss, it is suggested that LP holders try to split their liquidity in half between the two tokens.
Before staking in any product, be sure to do your own research to determine if the risk tolerance is right for your strategy and overall financial goals.
How will BANANA Maximizer Vaults get Implemented into ApeSwap?
Once the first five vaults are launched for staking, the ApeSwap team will continue to monitor their performance for testing and optimization. Based on community adoption and feedback, our team will add more Liquidity Pool combinations based on the order of highest sell pressure and community demand.
The older BANANA-BNB and BANANA-BUSD auto vaults will remain current for one week after launch, before being deprecated and moved to the “Inactive” vaults section. Withdrawal fees will be removed during the last active week, allowing users to withdraw and re-stake in BANANA Maximizers.
Bottom Line: Are BANANA Maximizer Vaults the Future?
The release of BANANA Maximizers represent a major step in the maturation of the ApeSwap protocol. Through the addition of these Liquidity Pool-based products, users now have the opportunity to drive long-term liquidity to the platform and have a stake in our collective growth. Moreover, creating multiple BANANA Maximizers (with community input) also allows users to earn compounding BANANA rewards without having direct exposure, opening doors to anyone exploring the world of decentralized finance in a safe and responsible manner.
By moving towards products which are healthier for our community, we continue to evolve and grow into a stronger and more unified platform. BANANA Maximizers are the next step in ApeSwap becoming the preferred decentralized finance platform on both the BNB Chain and across the cryptocurrency space.