With Arrakis vaults, passively holding an ERC20 LP token automatically exposes an LP to the underlying automated strategy. This encourages grassroots innovations in liquidity aggregation, such as those we have seen on Uniswap v2 style AMMs (Liquidity Mining, Protocol Owned Liquidity, LP tokens as collateral), in more efficient but also more complex markets such as Uniswap v3.
Moreover, Arrakis opens the door for a new area of decentralized market making with potential for tokenized products like:
- Liquidity as a Service Strategies
- Auto-Hedged delta neutral LP positions
- Sophisticated multi-positions on concentrated AMMs
- Cross-AMM positions
- LP positions coupled with lending/borrowing or options markets
- Cross-chain strategies
The overall purpose of the protocol is to aggregate, grow and sustain the best-in-class strategies for effective DEX liquidity provision, openly accessible to all and seamlessly composable with the rest of DeFi. In doing so, Arrakis fosters deeper and more robust liquidity for myriad projects and use cases across the web3 landscape.