What is Arrakis Finance (ARRAKIS)?
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🟢 The simple version
Plain English — no jargon. Start here.
Arrakis Finance is a liquidity management protocol primarily targeting DeFi protocols and DAOs — it helps protocols manage their own token liquidity on Uniswap v3 efficiently, using automated strategies that optimise fee income and capital efficiency, while retail users can also deposit into Arrakis vaults as LPs.
The protocol liquidity problem
When a new DeFi protocol launches a token, it needs to provide liquidity so users can buy and sell that token. Traditional approach: deposit tokens into a Uniswap v2 pool and lose money on impermanent loss as the token hopefully appreciates. With Uniswap v3 concentrated liquidity, protocols can be much more capital-efficient — but managing v3 positions requires expertise and active monitoring that most protocol teams don't have.
Arrakis fills this gap for protocols: a protocol deposits its token + USDC (or ETH) into an Arrakis vault, Arrakis manages the Uniswap v3 LP strategy, and the protocol earns trading fees on its own token pairs rather than just providing passive liquidity that generates no return. This is the "liquidity as a service" model — protocols outsource their LP management to Arrakis.
Arrakis v2 and PALM
Arrakis v2 introduced "PALM" (Protocol Automated Liquidity Management) — a system where protocols provide only one-sided liquidity (their own token) and Arrakis handles the full LP management including acquiring the paired asset. This makes it significantly easier for protocols to bootstrap liquidity without needing to hold large amounts of paired stablecoins or ETH.
Is ARRAKIS legal in India?
Yes. ARRAKIS qualifies as a Virtual Digital Asset (VDA) under Indian law. 30% tax on gains and 1% TDS applies. Always consult a tax professional.
🟡 A bit more detail
For when you want to go a little deeper.
Arrakis vs Gamma — different focus
Both Arrakis and Gamma manage Uniswap v3 LP positions automatically, but serve somewhat different markets. Gamma focuses primarily on retail LPs — anyone wanting to earn passive Uniswap v3 yields without active management. Arrakis focuses on protocols and DAOs as primary clients — it is the infrastructure that DeFi protocols use to manage their own treasury liquidity. Many protocols that need efficient token liquidity use Arrakis; retail LPs looking for yield tend to use Gamma or Kodiak Islands. The two are complementary rather than purely competitive.
G-UNI tokens
Arrakis vault positions are tokenised as "G-UNI" tokens (now ARRAKIS vault tokens in v2) — ERC-20 tokens representing a share of the vault's Uniswap v3 LP position. These tokens are composable: they can be staked in incentive programmes, used as collateral in lending protocols, or held passively. This composability is important for protocols using Arrakis: they can receive their G-UNI tokens and stake them in their own liquidity mining programmes, incentivising LPs without complex custom infrastructure.
Arrakis's revenue depends significantly on protocols choosing to use Arrakis for their liquidity management. If key protocol customers move to competitors (Gamma, internal management, or other tools), Arrakis revenue contracts. Monitor the number of active protocol vaults and total AUM as primary health metrics. Live data: CoinGecko
🟣 The full technical picture
For the technically curious.
Key facts
- Token: ARRAKIS (governance)
- Function: Automated Uniswap v3 LP management, primarily for protocols/DAOs
- Built on: Uniswap v3 (Ethereum primary) + other EVM DEXes
- Key product: PALM (Protocol Automated Liquidity Management) — one-sided LP
- Vault tokens: G-UNI / ARRAKIS vault ERC-20s (composable)
- Target customers: DeFi protocols and DAOs (plus retail LPs)
- Chains: Ethereum (primary) + Polygon, Arbitrum, Optimism
- Competitor: Gamma Strategies (retail focus), Bunni (veToken model)
- Origin: Evolved from G-UNI (Gelato Network's Uniswap v3 wrapper)
PALM — one-sided protocol liquidity
Traditional LP management requires providing both sides of a pair (e.g., 50% token + 50% USDC). PALM allows protocols to deposit only their own token. Arrakis then manages acquiring the paired asset via the protocol's own trading fees and strategic position management. Over time, as the LP position earns fees and rebalances, the vault naturally acquires both assets. This "one-sided bootstrap" is particularly valuable for early-stage protocols that hold most of their reserves in their own token and don't want to sell large amounts of their token to acquire paired assets upfront.