Arrakis Finance announces its $4 million raised in a seed funding round to develop its protocol and expand the team. The round involved investors such as Uniswap Labs Ventures, Accel, Polygon Ventures and Robot Ventures.
Arrakis Finance is a decentralized multichain market-making protocol that manages and harnesses Liquidity Pools to yield earnings for users. It was founded by Ari Rodriguez, a senior smart contract engineer at Gelato, and Hilmar Orth, co-founder of Gelato Network, a Web3 tool for automating smart contract execution on Ethereum.
The two co-founders released the first version of the Arrakis Finance protocol in April 2021 as a tool to allow the implementation of algorithmic strategies on Uniswap V3. Before being released as a separate protocol with a DAO in March 2022, it was incubated in the Gelato Network (Gelato DAO). It uses the $SPICE token as its native token.
Ari explained that the funding round, which spanned from May to September 2022, and had no lead investor, was made on a simple agreement for future tokens (SAFT).
Further details about the protocol show that Arrakis Finance offers products in areas such as cross-AMM positions, auto-Hedged delta-neutral LP positions, LP positions integrated with lending/borrowing or options markets, and multi-positions on concentrated AMMs.
Version 2 launched
According to Gelato, when the V1 of Arrakis vaults was released, several DeFi teams, such as MakerDAO, Aave, OlympusDAO Pro, Frax, Synthetix, Fei Labs, and Index Coop, integrated it into their platforms.
Rodriguez further stated that the first version of Arrakis vault, which attracted over $1.8 million TVL, was deployed by several users who wanted to interact with Uniswap V3. The most used case for the V1 was for managing pegged pairs like DAI-USDC, he added.
Version two of the protocol, released in the early days of December, functions as “an abstraction layer on top of concentrated liquidity automated market makers (AMMs) like Uniswap V3,” Rodriguez explained. With it, central limit order book options like interactions can be implemented in an AMM.
Since May 2022, there have been crashes of centralized platforms such as Luna, Celsius, and recently, FTX, which has made decentralized products more attractive for users. Other market makers, such as Keyrock and Flowdesk, raised $72 million (in November) and $30 million (in June), respectively.
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