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