Arrakis
  • Welcome to Arrakis Finance
  • Introduction
    • History
    • Problem Statement
    • Solution
    • Mission & Vision
  • Arrakis V2 Protocol
    • Introduction
    • Key Features
    • Vaults
    • Examples
  • PALM
    • Introduction
    • PALM vs. Liquidity Mining vs. Bonding
    • How it works
    • Examples
    • Apply to use PALM
  • Resources
    • Audits
    • Fees
    • Supported Networks
    • Technical Docs
  • Arrakis V1 (Old)
    • Arrakis LP Vaults V1
    • Vaults V1
    • Manager V1
    • Use Cases
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  • Case 1 - Pegged Asset Pairs
  • Case 2 - Volatile Pairs
  1. Arrakis V2 Protocol

Examples

A few typical use cases to demonstrate how to implement market making strategies through Arrakis V2.

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Last updated 2 years ago

The V2 infrastructure is extremely versatile, and virtually any strategy can be implemented on it. The example use cases below are only to suggest some ideas of what is possible. Feel free to contact us in our for any inquiries or comments.

Case 1 - Pegged Asset Pairs

For a pair of pegged assets, in order to allow for large sized trades, close to the peg, a large portion of the liquidity is in the 0.01% fee tier. In order to hedge liquidity providers’ risks, further away from the peg, the liquidity is automatically provided in the 0.05% and 0.3% fee tier.

Meanwhile, there can still be a good amount of sidelined assets inside the vault, which at any point of volume or volatility can be injected into the market as extra liquidity.

Case 2 - Volatile Pairs

Conversely, on a volatile pair, a liquidity distribution can be set up similarly to a centralized limit order book, where further away from the current price, the liquidity is deeper and deeper due to the larger spread. When the price moves, these LP positions also move. If volumes increase, more liquidity can be injected into the pool.

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