TL;DR Arrakis is evolving as we build DeFi’s first vertically-integrated liquidity solution. As part of this new chapter, we unveil Arrakis Pro, our revamped market making solution built to support token issuers. Arrakis Pro is designed to give token issuers capital-efficient, MEV-aware, market making strategies for every stage of their token lifecycle. Arrakis Pro’s modular design makes it easy for projects to deploy strategies on any liquidity protocol, on any chain.

Key Takeaways:

• Arrakis is unveiling Arrakis Pro, our newly revamped market making solution built to support token issuers and scale onchain liquidity.

• Arrakis is DeFi’s only onchain native market maker and Arrakis Pro is already known as the industry standard liquidity management solution.

• This solution automates liquidity provision and rebalancing in concentrated liquidity pools to help teams create deep markets onchain and earn fees in a capital-efficient manner.

• The AMM space is changing and Arrakis Pro taps into the most promising new designs with a cutting-edge modular framework.

Arrakis is evolving as DeFi matures. We recently announced our plans to build the first Decentralized Vertically-Integrated Market Maker (DVMM) to hyperscale onchain liquidity with a focus on MEV awareness. This mission starts with the newly launched HOT AMM, which adopts a groundbreaking intent-centric design to minimize MEV extraction.

Arrakis is building the first vertically-integrated liquidity solution to support onchain markets. As we embark on this mission, we’re pleased to announce that our flagship onchain market making solution has rebranded to Arrakis Pro. Formerly known as PALM, Arrakis Pro is the first onchain market maker. It’s become recognized as the industry standard liquidity management solution, with early customers including some of DeFi’s leading protocols and DAOs. These teams trust Arrakis Pro because it helps them achieve deep liquidity, reduce their price impact, and generate better returns.

But the AMM space is changing and Arrakis Pro is changing with it. The new Arrakis Pro is built on a modular framework, unlocking new possibilities in how teams manage liquidity and deploy strategies across DEXs. While AMMs are becoming increasingly complex and fragmented as they embrace innovations from third-party developers (such as Uniswap V4’s Hooks), Arrakis Pro’s modular framework allows token issuers to port their liquidity and deploy strategies on any innovative AMM design, on any next-generation DEX, on any chain. We explain more below.

Addressing the Inventory Problem

Arrakis Pro is the first onchain market maker, powering Protocol Owned Liquidity for projects. When any protocol launches a new trading pair in a pool, their main aim is to achieve liquidity depth and capital efficiency.

To do so, they need to provide ample inventory for two assets:

• The quote asset, i.e. the token that they are launching.

• The base asset, i.e. USDC or ETH.

This creates what’s known as “the Inventory Problem.” Protocol teams can usually provide a sufficient amount of their quote asset because they created it. But their inventories often fall short on the base asset (and they need this for sell side liquidity). Previously, teams would take one of two approaches to address the Inventory Problem:

• Liquidity Mining. But as DeFi summer proved, this strategy is costly and unsustainable because it incentivizes mercenary dumping.

• Bonding/OTC deals. This approach relies on big players at the other side of the deal and engaging with them often has a significant time and marketing expense.

While DeFi relied on liquidity mining and bonding in its early years, both strategies are flawed because the costs are high and the token issuer must effectively borrow liquidity to pay it back later.

Arrakis Pro addresses the Inventory Problem by bootstrapping liquidity for projects. When a team provides their token from their inventory for a pool, Arrakis Pro adds the base asset over time to rebalance the pool. No swapping is required.

Managing Concentrated Liquidity

Uniswap V3’s concentrated liquidity feature marked a dramatic shift in how liquidity could be managed more efficiently. However, many teams fail to use V3 pools effectively because managing positions is a drain on team resources. This has negative outcomes:

• Their liquidity may sit out-of-range, meaning that their positions are inactive and they miss out on fees.

• Their liquidity may sit in too wide of a range, meaning that their position suffers from IL during volatility and users suffer from high slippage when trading against it.

Arrakis Pro provides sophisticated market making services to ensure teams manage their resources effectively and avoid such outcomes.

How Arrakis Pro Supports Token Issuers

Arrakis Pro uses concentrated liquidity to help token issuers achieve liquidity depth and enhanced capital efficiency. The solution is especially useful for teams launching tokens because it is designed to address an issue many token issuers face in the lead-up to launching: Ensuring deep liquidity on the buy and sell side.

Arrakis Pro is powered by Arrakis’ offchain market making infrastructure. It has a few primary functions to drive better results for teams:

• Inventory bootstrapping, which involves rebalancing pools to achieve a 50:50 ratio between a pair. With this strategy, Arrakis Pro accumulates the base asset (i.e. USDC/ETH) by selling the quote asset (i.e. the governance token) This means a team can provide their token and USDC at a ratio of 90:10 and the pool will rebalance to 50:50 over time.

• Active liquidity management, which involves adequately maintaining price ranges and thus market depths during both volatile times (i.e. price discovery after launch) and more stable times in a token’s life cycle. This involves algorithmically widening or tightening ranges to respond to market conditions and actively rebalancing positions after or before they go out of range.

• MEV protection, which involves minimizing losses to arbitrage-related MEV. Arrakis also leverages offchain systems to monitor real-world data and ensure quotes aren’t given out at stale prices (preventing arbitrageurs from extracting value from the pool).

• Integrating with intent-based systems, which involves bringing Arrakis’ network of solvers that are active across CoW Swap, 1inch Fusion, and UniswapX to token issuers so their governance token can be integrated with leading intent-based protocols from day one.

DeFi’s Go-To Liquidity Management Solution

Arrakis Pro has become known as DeFi’s go-to liquidity management solution. To date, Arrakis Pro has facilitated over $500 million in volume, creating more competitive pools across multiple token pairs. Arrakis Pro’s vaults also generate fees and improved returns for users. For these reasons, the solution is trusted by both nascent projects and titans like Lido and Stargate.

The main benefits Arrakis Pro users enjoy can be summarized as follows:

• Deeper liquidity

• Reduced price impact and volatility

• MEV protection

• Integrating with intent-based systems

• Increased fee revenue

Arrakis Pro users receive these benefits without depending on external capital. Teams can use their inventories in a capital-efficient manner without having to take out a loan that must be paid back. Aside from bootstrapping liquidity for projects, it can also help funds and LPs use strategies to improve their returns when they may otherwise be passive.

Modularity and the AMM Renaissance

Arrakis Pro solves DeFi’s dependence on large, well-capitalized entities. Additionally, the solution is now embracing modularity, allowing projects to deploy strategies across any major liquidity protocol (DEX, AMM, Hook, etc.).

Our team has spent a long time studying the AMM landscape and it’s clear to us that the space is evolving and modularity will transform the onchain future. Arrakis Pro will play a vital role in the AMM renaissance. This includes leveraging the capabilities of Hooks on Uniswap V4—we’ll share more details on how later.

Arrakis Pro enhances liquidity depth and helps teams deploy their resources in a more capital-efficient manner while improving their revenues. The solution is live now and our team is on hand to help you bootstrap your liquidity. To learn more, visit our website. To reach out about onboarding, fill out our contact form.