Arrakis Finance is a liquidity management protocol leading DeFi projects use to launch liquidity for their tokens on multiple blockchains. It is web3’s trustless market-making infrastructure protocol enables complex algorithmic strategies to be run on Uniswap V3. Liquidity providers can use Arrakis Vaults to manage their liquidity in an automated, capital-efficient, non-custodial, and transparent manner.
Some of the top DeFi projects that have adopted the Arrakis vault include Aave, MakerDAO, and Synthetix. At its peak in July 2022, the platform had a total locked value (TVL) of $206.54M.
Arrakis aims to address the tough spots that many projects in web3 are facing today. Traditional Uniswap v2 Automated Market Makers (AMMs) offer a one-size-fits-all liquidity solution. Although simple, they could be more efficient and affordable to subsidize liquidity schemes. Next-generation AMMs like Uniswap v3 offer liquidity efficiency improvements, however, at the expense of increased complexity and risk for liquidity providers (LPs).
The multi-chain landscape makes liquidity increasingly fragmented, and the operational costs to manage liquidity are exponentially higher. Projects are forced to devote unnecessary time and resources to complex topics such as active liquidity management, cross-chain liquidity provision, and spending modeling for market-making programs. Arrakis solves these problems by creating a regulated marketplace of new tokenized LP strategies to facilitate deep liquidity and optimize LP earnings.
Arrakis is a protocol that is built for liquidity providers that are either regular retail LPs, institutional funds or web3 protocols themselves to enjoy actively managed concentrated liquidity on Uniswap v3. LPs retain full custody over their funds and can withdraw at anytime.
They can select three different options that define how their liquidity gets managed:
The other possibility exists for market makers and sophisticated traders that can offer to manage the liquidity of other LPs in return for a % share of their fee earnings. All of this occurs on-chain, meaning that protocols can monitor how these market making strategies are performing transparently.
Arrakis Finance has two main products: V2 Protocol (an upgrade from the previous V1 version) and Leverage Protocol Automated Liquidity Management (Palm).
As a new generation AMM developed and enhanced from the previous V1 version, it is generally the project’s main product. The protocol will have the main features:
In addition, the vault is a means of pooling many of the features of Arrakis V2 and a place where users can deposit liquidity into the protocol. There will be 2 features in the vault: depositor (Access), operator (Manager), and anyone can become a vault manager. There are two types of vaults:
Arrakis V2 will not charge users of the platform for free use, however, vault managers may charge a fee (depending on their requirements).
Since the launch of Arrakis V2, according to data from DeFillama TVL V2 is somewhat lower than the V1 version (before it). By March 27, 2023, also thanks to the explosion of the Arbitrum ecosystem, the Arrakis community has partly noticed, proving that the TVL level on Arrakis V2 has increased sharply from 2 million USD to more than 4 million USD (reaching 4 million USD). 93.72% in the last 7 days, according to Alpha Growth).
Is the first automated liquidity management protocol implemented on V2, allowing protocols and DAOs to create liquidity on Uniswap. PALM is independent of market conditions, can follow any price movement and is designed to solve 2 main problems:
Usage fee in PALM will be calculated as follows:
Prominent DeFi projects like Frax, Aave, MakerDAO, Olympus Pro, Synthetix and many more have used the Arrakis vault since the release of v1. Arrakis Vaults offers one of the largest collateral/liquidity positions for many of these protocols.
According to the documents from the platform, passively holding ERC-20 LP tokens in Arrakis vault effectively injects the LP into the underlying automated strategy. This drives bottom-up innovations in liquidity aggregation, like those seen on Uniswap v2 type AMMs (Liquidity Mining, Liquidity Owned by Protocol, and LP tokens as collateral). mortgage), in more efficient but also more complex markets such as Uniswap v3.
Furthermore, Arrakis paves the way for a new area of decentralized market innovation with the potential for tokenized products such as:
The ultimate goal of the protocol is to assemble, develop, and maintain best practices for providing efficient DEX liquidity, publicly available to anyone, and easy integration with the rest of DeFi. . In this way, Arrakis promotes deeper and more reliable liquidity for multiple projects and use cases across the web3 ecosystem.
Arrakis Finance uses the $SPICE token to help it achieve its goal of decentralization. SPICE is airdropped to users in the Arrakis protocol and GEL holders on Gelato. This is also an encouraging activity of both founders for their community, led by Co-founder of Arrakis – Mr. Hilmar Maximilian Orth is also a co-founder of Gelato. Currently, the Arrakis docs do not mention SPICE and only have information on Twitter, so the token information will be missing.
SPICE token has the following use cases:
Arrakis and Gelato just announced that they would airdrop to users with 3% (total supply of SPICE, expected to air to users in 2023). As of the time of writing (March 28, 2023), SPICE has not yet released details on the number of tokens allocated.
Arrakis Finance has not held a community token sale, possibly not. Instead, the tokens will be airdropped to users, projects, and people who lock GEL (on Gelato).
The GEL Lockdrop program launched in May 2022, a total of 30,000,000 SPICE tokens (3%/total supply) will be allocated for this program. The lock period starts on May 19, 2022, and counts down within 90 days (ends September 8, 2022). Airdrop is a SPICE token and is expected to be distributed in 2023.
The best chance to get the $SPICE airdrop is to provide liquidity on the Arrakis Vaults. The protocol is live on four mainnets: Ethereum, Polygon, Optimism, and Arbitrum. So you will need real funds to qualify for the $SPICE airdrop. Here’s a step-by-step guide:
If you want to minimize impermanent loss risk, stablecoin pair LPs are a safer choice.
The overall purpose of the Arrakis Finance protocol is to synthesize, develop and maintain best-in-class strategies to provide efficient, publicly accessible DEX liquidity to all and seamlessly composable with the rest of DeFi. By doing so, Arrakis adds deeper and more powerful liquidity to a multitude of projects and use cases across the web3 landscape. The Arrakis team confirmed on Discord that there would be a $SPICE airdrop. This could be one of the potential big airdrops, so keep an eye on the details on the project’s official pages so you don’t miss this opportunity.
Besides, the project also needs to face a number of similar projects in the same field, including: Uniswap V3, Convex Finance, Aura, Rari Capital, StakeDAO, Homora V2…
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.
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