Pangolin V2

Pangolin is a community-run DEX, surveyed here on Avalanche. Liquidity providers hold two-token pool positions that rebalance against traders, so their balance drifts toward whichever asset falls. That impermanent loss is a loss the client was never told to expect, in a position we recommended, and the class rule rejects the entire AMM category for that reason. TVL was about $1.47 million at the 2026-08-15 survey across Avalanche, Hedera, Songbird and Flare. A product line without impermanent-loss exposure would reopen the file.

Review triggers: events that reopen the verdict
• Ships a product line without impermanent-loss exposure that merits its own review

Watched nightly: a warning on its venues or files, or a cited document that changes, reopens the memo. The first confirmation is due 2026-11-15.

The research file

Mechanism applicability

Pangolin V2 uses Uniswap V2-style constant-product pools. An LP supplies both pool tokens, receives a fungible claim on the reserve pair and earns a share of swap fees. Arbitrage changes the reserve composition as relative prices move, so withdrawal returns the then-current mix rather than the original value split. Pangolin’s incentives and governance tokens do not remove this paired market-making exposure.

Current observation and perimeter

The DefiLlama protocol API read on 2026-08-15 classified Pangolin V2 as a DEX and reported approximately $1.47M: about $1.45M on Avalanche, $0.02M on Hedera, and small Flare and Songbird balances. Current Pangolin materials document distinct governance tokens and live contracts across those four networks. The registry corrects the prior Avalanche-only perimeter while keeping this application limited to the measured V2 pools.

Control, loss and exit applicability

Pangolin documents a 0.3% V2 swap fee, governance over protocol changes and Avalanche governance and timelock contracts. LP fees compensate activity but do not guarantee recovery of divergence loss. A V2 LP can burn its pool claim for its pro-rata reserves; thin pools, volatile pairs and incentive migration can worsen execution around that exit even though the burn itself is permissionless.

Why the class rule decides

The claim-to-source fit is direct: the surveyed balances are V2 AMM reserves and the client claim is paired pool inventory. Multi-chain deployment, DAO governance and current fee income do not convert it into single-asset yield. The shared version-1 amm-lp dossier therefore decides. Reopen only for a separately measured Pangolin product without paired or synthetic market-making exposure, followed by a fresh chain, control, incident, liquidity and alternatives review.

Class rule

The amm lp class is outside the approved structures, so every protocol in it is not approved until the rule changes. The rule is about the structure, not an adverse finding about this protocol, and it is not a client instruction. The events that would reopen it are listed with the memo.

Sources

The claims above trace to these. Where a number could not be independently verified, the thesis says so.

• Pangolin — V2 tokenomics and pool fees · primary · accessed 2026-08-15
  Supports: Pangolin V2, Uniswap V2 contracts, 0.3% fee, governance, liquidity pools
• Pangolin — multi-chain governance perimeter · primary · accessed 2026-08-15
  Supports: Avalanche, Flare, Songbird, Hedera, governance tokens
• Pangolin — Avalanche V2 contracts · primary · accessed 2026-08-15
  Supports: V2 factory, V2 router, governor, timelock, multisig
• Uniswap — V2 liquidity-token accounting · primary · accessed 2026-08-15
  Supports: constant product, liquidity tokens, pro-rata reserves, arbitrage, withdrawal
• DefiLlama — Pangolin V2 survey record · secondary · accessed 2026-08-15
  Supports: current TVL, Avalanche, Hedera, Songbird, Flare, DEX category

Inherited controls

The research above describes the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The layer with the most administrative power sets the position’s effective control; that describes control, not quality or suitability.