SINGAPORE, March 23, 2022 (GLOBE NEWSWIRE) — Leading Solana decentralized exchange (DEX) Orca today unveiled its new concentrated liquidity offering, Whirlpools, bringing greater capital-efficiency to the Solana ecosystem.
Whirlpools begin a beta phase today, offering market makers the opportunity to get higher returns and benefiting traders with lower slippage across a selection of three trading pools.
The move means that from today market-makers can select a specific price range in which to “concentrate” their liquidity in these pools in order to earn higher fees and rewards on that liquidity, hence the term concentrated liquidity. This deeper liquidity, in turn, leads to better prices for swaps on these asset pairs.
Orca, which has been built to be the most approachable, secure, and technically advanced decentralized exchange, expects to roll out Whirlpools for other trading pools in the coming weeks and months, and ultimately expects to be able to offer Whirlpools on all token pairs listed on the exchange. In the future, Orca also expects to build support for permissionless listings which will allow anyone within the Solana ecosystem to create their own Whirlpools.
Whirlpools use an entirely custom smart contract developed by the Orca team, which will be open sourced in the near future to allow other teams in the Solana ecosystem to tap into this new, more capital-efficient source of liquidity.
The expectation is that Whirlpools will provide much greater capital efficiency, and can provide market-makers with higher returns, although they would also be subject to higher risks. In addition Whirlpools also offer a streamlined, more user-friendly deposit and portfolio UX compared to existing concentrated liquidity AMMs.
The deeper liquidity provided through Whirlpools reduces slippage costs, which means that traders will be able to benefit from better prices on their swaps.
Yutaro Mori, co-founder and Head of Engineering at Orca, said he was excited to be able to offer this functionality to Solana users.
“We know the community has been asking for concentrated liquidity on Orca for a while, and Whirlpools deliver that,” he said.
“I expect Whirlpools to thrive not only for blue chips, where we can expect hundreds of millions in trading volume per day, but also for long-tail tokens, where there are hundreds of thousands in trading volume.
“I think Whirlpools will perform incredibly well and become the ideal place for people to trade any fungible token.”
Whirlpools roll out today on Orca, with rewards beginning on March 24. Initially, they are available across three trading pools (MSOL-USDC, SOL-USDC, and ORCA-USDC). You can find out more on Orca’s Medium.
The benefit of Whirlpools is that instead of earning fees on a theoretical price range between zero and infinity, as in the constant product model used by most AMMs, liquidity providers can concentrate their deposit to only be used when the price of the assets is within a given range, earning higher fees for each applicable trade.
While Ethereum users have enjoyed the concentrated liquidity available to them for months via Uniswap v3, Solana users have had much more limited access, but will now be able to benefit from Orca’s user-centric DEX.
There are also a number of other differences to Uniswap v3, including:
- Lower transaction fees on Solana, which make it feasible to LPs with much lower deposit amounts.
- Built-in yield farming in the core smart contract.
- A simpler, more guided liquidity provision experience (for instance, Orca will show estimated APR and offer both preset and custom price ranges).
The Whirlpools beta will run for at least two weeks and is only available to holders of Orca’s Orcanauts NFT collection.
Along with Orca’s mission to provide a user-friendly and capital-efficient decentralized exchange on Solana, the team is committed to supporting impactful causes. In addition to a donation of over $960,000 USD to fund a crypto and DeFi education curriculum in partnership with financial education nonprofit Aflatoun, Orca also donates portion of all swap fees to charities focused on climate change and sustainability via the Orca Impact Fund. The first donation of over $1m, representing the fees accumulated through Dec 2021, is planned to go to the Ocean Conservancy.
Orca is the DEX you can trust, with a commitment to providing a best-in-class user experience for market makers and retail traders alike. Through all of their efforts, Orca aims to be the go-to automated market maker protocol for the Solana ecosystem