Arrakis (G-UNI)

Yield Aggregator

Arrakis (previously G-UNI) is a liquidity optimization protocol that helps users optimize their Uniswap v3 positions.

Risk Rating
Average
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Arrakis specializes in active liquidity management for Uniswap V3 positions. Since inception, Arrakis has become the largest liquidity provider (LP) on Uniswap without requiring any liquidity mining incentives.
What we like less
Some Arrakis vaults are controlled by an external manager address which can alter the range of the underlying Uniswap V3 position.
What it means for you
Allows you to take advantage of automated concentrated liquidity strategies on Uniswap V3 without having to personally manage the position.
Information
Exploit/Hacks
None
Info
Key Metrics
  • TVL: $113.5M (Rank #64)
  • TVL Ranking by Yield Aggregator: #0
  • Blockchain: Ethereum, Optimism, Polygon
  • Chain TVL
    • Ethereum: $109.01M
    • Optimism: $3.46M
    • Polygon: $1.05M
Risk Assessment
Average
Protocol Code Quality
  • Code reviewed by at least one experienced auditor; CertiK audited in July 2021
  • Public team promotes accountability
  • No documented protocol hacks since launch
Protocol Maturity
  • Core protocol launched in 2022; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Top 1% by total value locked reduces risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of at least 4 signers, which means the protocol is less susceptible to centralization risks
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • No governance token and/or contracts are fully immutable
Protocol Design
  • No death spiral concerns
  • This protocol is susceptible to risks related to yield optimizers which deploy custom strategies to automatically manage user funds
  • Arrakis is a protocol built on top of Uniswap V3 that specializes in active liquidity management strategies to facilitate deeper liquidity and optimize LP earnings
Things to know about Arrakis (G-UNI)

What is G-UNI?

G-UNI is an in-house DeFi application built by Gelato (decentralized automation protocol) to showcase the power of its automation infrastructure. It is a framework for managing Uniswap V3 liquidity positions (ERC-20 wrapper) that makes these positions fungible and auto-compounds the earned fees within the pool. G-UNI can essentially be thought of as making Uniswap V3 positions, which are non-fungible and non-compounding, similar to Uniswap V2 positions, which are fungible and auto-compounding. Several major DeFi projects (MakerDAO, Aave, Frax, and more) are already using the product as their go-to liquidity management solution. As its popularity and usage has grown, the team at Gelato porposed to its community to separate the product as its own DeFi application that happens to use Gelato automation, which ultimately led to the creation of Arrakis.

How Arrakis works

Arrakis liquidity provider (LP) vaults are the underlying technology that enables the protocol to automate liquidity management strategies. These vaults are currently only active on Uniswap V3. The vaults are smart contracts that interact with two users: projects and users who deposit funds and vault managers who activate strategies in these vaults. LPs who deposit into a vault receive a fungible LP token back that represents their proportional share of the overall vault position. The manager account within Arrakis' vaults are completely permissionless and is specified by the vault deployer. The manager can specify the active range that should be used, how to shift the liquidity of the vault around, and the amount they want to swap to rebalance the position. The Bene Gesserit strategists are the first whitelisted managers by Arrakis, with a focus on optimizing for long-term sustainable liquidity for project tokens.

Risks of using Arrakis

The main risk of using Arrakis is the compounding risks of being exposed to smart contracts of both Arrakis (G-UNI) and Uniswap V3 position. The vault manager is the most important and centrally trusted role in Arrakis vaults. It is can configure the range of the underlying Uniswap V3 position and is the only role that has the power to potentially extract value from the position. The manager is a permissionless account that could be controlled by a DAO or a project's multisig, so the user should be fully aware of who the underlying vault manager is before depositing liquidity.