Kodiak Island

The implementation of kodiak Island contract

The Kodiak Island contracts provide a framework for creating and managing concentrated liquidity positions on Kodiak V3. They enable users to deposit tokens into a managed Kodiak V3 position, receiving shares in return. They allow managers to rebalance the position, collect fees, and adjust the position and management parameters. The contracts support minting, burning, rebalancing, and integration with external routers for complex strategies.

Adding/Removing Liquidity

These functions are used to mint/burn island shares resulting in adding/removing liquidity from the island's underlying v3 pool position. It is highly recommended to use the Island Router to add/remove liquidity as it handles slippage settings.

Adding Liquidity

function mint(
    uint256 mintAmount,
    address receiver
) external returns (
    uint256 amount0,
    uint256 amount1,
    uint128 liquidityMinted
)

Mints new Island tokens by providing liquidity to the underlying Kodiak V3 position.

  • mintAmount: Number of Island tokens to mint

  • receiver: Address to receive the minted tokens

  • Returns amounts of token0/token1 used and liquidity added

Removing Liquidity

Burns Island tokens to withdraw underlying assets.

  • burnAmount: Number of Island tokens to burn

  • receiver: Address to receive the underlying tokens

  • Returns amounts of token0/token1 received and liquidity removed

Compounding collected fee

Collects the fee earned by the island's position and reinvests as much of token0 and token1 into the position as possible after deducting the manager fee from the collected fee.

View Functions

Get Underlying Balances

Returns:

  • amount0Current: The total amounts of underlying tokens represented by the entire Island supply. This includes deployed liqudity (uni v3 pool tokens), any unclaimed earned fee, and any undeployed tokens

  • amount1Current: The total amounts of underlying tokens represented by the entire Island supply. This includes deployed liqudity (uni v3 pool tokens), any unclaimed earned fee, and any undeployed tokens resulting from fee imbalance

Get Mint Amounts

This function allows you to find the optimal deposit amounts for token0 and token1 in correct ratio to deposit maximally into the underlying island position Arguments:

  • amount0Max: Max amount of token0 the user is willing to deposit

  • amount1Max: Max amount of token1 the user is willing to deposit Returns:

  • amount0: The amount of token0 used from the max

  • amount1: The amount of token1 used from the max

  • mintAmount: The number of island tokens minted using amount0 and amount1

Get Underlying Balances At Price

This function calculates the underlying token balances at a specific price point Arguments:

  • sqrtRatioX96: The sqrt price to calculate balances at, in Q96 format Returns:

  • amount0Current: Amount of token0 at the specified price

  • amount1Current: Amount of token1 at the specified price

Get Position ID

Returns the unique identifier for the current Kodiak V3 position Returns:

  • positionID: Keccak256 hash of packed (island address, lowerTick, upperTick)

Get Token0

Returns the address of token0

Get Token1

Returns the address of token1

Get Upper Tick

Returns the upper tick of the island's position

Get Lower Tick

Returns the lower tick of the island's position

Get Pool

Returns the address of the Kodiak V3 pool

Get Total Supply

Returns the total supply of the island tokens

Get Balance Of

Returns the balance of the specified account

Get Manager Fee BPS

Returns the manager fee in basis points

Get Manager Treasury

Returns the manager treasury address

Get Manager Balance 0

Returns the manager balance of token0

Get Manager Balance 1

Returns the manager balance of token1

Get Manager

Returns the current manager address. Should be address(0) for unmanaged islands

Island Management

This is applicable only for managed islands. Permissionless islands only expose the functionality to compound the fee collected.

Admin roles involved

  • manager - can alter island position bounds to manage liquidity optimally

  • pauser - can pause operations in case of a security breach

Island Configuration Parameters

Manager Parameters

  • manager: The address authorized to perform management operations like rebalancing

  • managerTreasury: Address where manager fees are sent

  • managerFeeBPS: Percentage of earned fees that go to the manager (in basis points, max 10000)

  • restrictedMint: When true, only the manager can mint new Island tokens

  • compounderSlippageBPS: Maximum allowed slippage for rebalance operations (in basis points)

  • compounderSlippageInterval: Time window for TWAP price calculation using kodiak pool observations (in seconds)

Island Position Parameters

  • lowerTick: Lower price bound of the Kodiak V3 position

  • upperTick: Upper price bound of the Kodiak V3 position

  • pool: The underlying Kodiak V3 pool address

  • token0: First token in the uni pool pair

  • token1: Second token in the uni pool pair

Manager Fee

For active management of the island, the manager fee is collected from the UniV3 earned fees. For Kodiak team managed islands the manager fee is 0.

  • Fee = (Total Fees Earned * managerFeeBPS) / 10000

  • Unmanaged/Permissionless Islands use the Island factory's default fee settings

Restricted Minting

When restrictedMint is enabled:

  • Only the manager can mint new Island tokens

  • The first mint needs to atleast add INITIAL_MINT amount of liquidity.After the first mint this liquidity is burned.

Manager Functions

Update Manager Parameters

Updates the manager configuration parameters for the island Arguments:

  • newManagerFeeBPS: New manager fee in basis points (-1 to keep current)

  • newManagerTreasury: New treasury address (address(0) to keep current)

  • newSlippageBPS: New slippage tolerance in basis points (-1 to keep current)

  • newSlippageInterval: New TWAP interval in seconds (-1 to keep current)

Executive Rebalance

Rebalances the position by changing price range and optionally performing underlying pool swaps Arguments:

  • newLowerTick: New lower price bound of the position

  • newUpperTick: New upper price bound of the position

  • swapThresholdPrice: Maximum/minimum price for the swap in sqrtPriceX96 for uni v3 slippage protection

  • swapAmountBPS: Percentage of excess available tokens to swap in BPS

  • zeroForOne: True to swap token0 for token1, false for opposite

Notes: In order to generate the parameters for an executive rebalance one has to understand the flow of this operation. First, the Kodiak island removes all the liquidity and fees earned. Then, it tries to deposit as much liquidity as possible around the new price range. Next, whatever is leftover is then swapped based on the swap parameters. Finally, another deposit of maximal liquidity to the position is attempted and any leftover sits in the contract balance waiting to be reinvested.

  1. Call getUnderlyingBalances on the ArrakisVault to obtain amount0Current and amount1Current

  2. Compute amount0Liquidity and amount1Liquidity using LiquidityAmounts.sol library, the new position bounds, the current price and the current amounts from step 1.

  3. Compute amount0Leftover and amount1Leftover with formula amount0Leftover = amount0Current - amount0Liquidity. In most cases one of these values will be 0 (or very close to 0).

  4. Use amount0Liquidity and amount1Liquidity to compute the current proportion of each asset needed.

  5. Use the amount0Leftover and amount1Leftover and the proportion from previous step to compute which token to swap and the swapAmount.

  6. Convert swapAmount to swapAmountBPS by doing swapAmount * 10000 / amountLeftover for the token being swapped.

Executive Rebalance With Router

Rebalances using an external router for optimized swaps across all available liquidity. Arguments:

  • newLowerTick: New lower price bound of the position

  • newUpperTick: New upper price bound of the position

  • swapData: Struct containing:

    • router: Address of whitelisted router to use

    • amountIn: Amount of tokens to swap

    • minAmountOut: Minimum tokens to receive

    • zeroForOne: Swap direction

    • routeData: Encoded swap route data

Set Restricted Mint

Restricts minting to only the manager address Arguments:

  • _status: True to restrict minting, false to allow public minting

Set Pauser

Adds or removes an address from the pauser role Arguments:

  • _pauser: Address to modify pauser status for

  • _status: True to add as pauser, false to remove

Pause/Unpause

Emergency functions to pause/unpause all island operations

  • pause: Can be called by manager or pauser

  • unpause: Can only be called by manager

Fee Management

Withdraw Manager Balance

Withdraws accumulated manager fees to the manager treasury

  • Transfers all accumulated token0 and token1 fees

  • Resets manager balance tracking to zero

Sync To Factory

Updates unmanaged island parameters to match factory settings when updated.

  • Updates manager treasury to factory treasury

  • Updates manager fee to factory default fee

  • Only affects islands with no active manager

ABI

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