Fremen Bi-Weekly #10

This week's Fremen Bi- Weekly we dive into some PALM stats, how is it performing?

Before doing that, we wanted to highlight a great thread yet again made by @thiccythot_ he dives deep into how centralized market making deals are currently structured in the crypto space. This lack of transparency is something that we have also seen over the last few years, and something that we are tackling with Arrakis V2 the infrastructure that any of these market makers could use, as well as with PALM our own product.

If you are interested in how the deals work, dive into the thread here:

Arrakis PALM Stats

We have new dashboards (still some work in progress)! Now setup for all of the networks that we have PALM vaults running on. As a reminder PALM vaults are POL (protocol owned liquidity) vaults and thus only DAOs are currently using these vaults.

Dune Mainnet (dropdown for all the vaults currently not available)
Dune Arbitrum
Dune Optimism
Dune Polygon

So let’s dive into a few data points from the current 14 vaults that are live:

In regards to the twitter thread mentioned above, let’s look at how PALM has solved the issue of not having base assets.

As a prerequisite Kwenta deposited 5% WETH and 95% KWENTA into PALM. Over the period from the 26th of Feb to today, we accumulated up to 67% WETH via LPing in the market, which were then dollar cost averaged back into KWENTA as it dropped. All of this happened while not actually underperforming hold on the longer time scale (chart on the right- Black line is the LP value, Orange the Hodl value if Kwenta would have stuck with the 5% ETH,95% KWENTA).

Composition + Performance of WETH/KWENTA PALM Vault
Composition + Performance of WETH/KWENTA PALM Vault

With the GEL vault we have seen a very similar situation, starting with only 8% ETH and after accumulation keeping between 55%-42% ETH. With this vault the performance is very slightly under the hold performance, yet still tracks it very nicely since the vault has been deployed.

Composition + Performance of WETH/GEL PALM Vault
Composition + Performance of WETH/GEL PALM Vault

In order for a market to be liquid we need to make sure that we are actually facilitating volume with PALM. Most importantly PALM needs to be capital efficient, in order to still perform well and not risk too much capital in the market.
In the case of GEL we can see that with 25% of the TVL in the market, PALM is facilitating almost 66% of the total volume. 

GEL/ETH Toal TVL and PALM TVL Volume Facilitated
GEL/ETH Toal TVL and PALM TVL Volume Facilitated

In the case of Perpetual Protocol we see an even more impressive capital efficiency. With only 2.91% ($39k) of the total TVL, PALM is facilitating 36% of the volume. Meaning for the $PERP DAO with a small amount of risk a high amount of value is added.

PERP/ETH TVL Share + Facilitated Volume
PERP/ETH TVL Share + Facilitated Volume

In regards to the $PERP vault, we can actually see that it is outperforming Hold, currently being about 1% in profit.

Relative and USD Performance of $PERP PALM Vault vs Holding
Relative and USD Performance of $PERP PALM Vault vs Holding

This is just a small subset of all the data that we are tracking, if you want to take a deep dive feel free to check out the dashboards mentioned above yourself. One of the next tasks on our hands is to actually see how our performance also compares against other DEXs.

Hopefully this Bi-Weekly Fremen has introduced you somewhat to the efficiency of Arrakis PALM. As always if you have any questions feel free to ask us in the discord!

Arrakis is a protocol that builds trustless market making infrastructure & strategies on Uniswap V3.

Join the community of Fremen and become a part of Arrakis:

Subscribe to ✨Arrakis Finance
Receive the latest updates directly to your inbox.
Mint this entry as an NFT to add it to your collection.
This entry has been permanently stored onchain and signed by its creator.