Aark incorporates LST/LRT assets into Aark’s LP pool. These assets work as liquidity for traders and facilitates high volume trades. This enables LST/LRTs to earn attractive real yields generated from trading fees.
Layer 1 is the layer that puts ETH to work by validating the Ethereum network. stETH is minted and earns yields.
Layer 2 puts this stETH to work by validating actively validated services(AVS). eETH is minted and earns yields from both stETH and eETH.
Layer 3 puts this eETH to work by working as liquidity for perpetual traders. AALP is minted and earns yields from all stETH, eETH and trading fees.
Aark is the next liquidity layer for LST/LRT, and due to our unique infrastructure, is the only perp DEX that makes this innovation possible.
Aark as the Layer 3 for liquidity backed by LST/LRT.
In a pool-based perp DEX, the liquidity pool earns yield by taking the other side of traders. Traditional pool-based perp DEXs either have structural limitations to add more assets in the pool(ie Gains Network only accepts DAI) or baskets(GLP) where LPs are exposed to a myriad of unwanted assets. Aark’s advanced LP design not only enables invitation of LST/LRT liquidity into the pool, but also its single-sided design ensures that users are not exposed to volatility of any other assets other than the LST/LRT they deposit.
For users, this creates an additional layer of yield. On top of the validator rewards, the LST/LRT assets earn trading fees by when deposited into Aark’s AALP pool to work as liquidity for traders. Additional risk arising from this third layer is minimal because (1) the Layer 3 involving Aark is not a validation layer, thus are not prone to risks such as slashing; and (2) directional risk is removed from the AALP pool due to Aark’s delta-neutral design. Thus, Aark enables users to safely earn additional yields on top of stETH/eETH yields.
For the protocol, using assets with potential depeg or manipulation risk possess instability as in the Mango Markets case if used as trader’s collateral: Manipulators can bloat the collateral’s value and open sizable positions to drain the pool. Yet, LST/LRT is not used as trader’s collateral in Aark but only as a liquidity asset for the Aark LP pool. Thus, even if the LRT asset is depeged, there is no further effect than the fact that the LP pool size has diminished. By having the assets with largest TVL(LST/LRT) as a source of liquidity for the AALP pool, Aark has the greatest scalability among any perpetual DEXs.
Innovation doesn’t end here: Aark allows for a further hyper-diverse set of assets for liquidity provision. Beginning from the basic assets such as ETH, ARB, stablecoins, Aark is the first perp DEX that allows for RWA and DEX LP tokens as LP assets, enabling dual yields for these yield-generating assets.
For instance, Uniswap v2 LP tokens, Uniswap v3 NFT positions, Curve USDC-USDT pool tokens, or any other tradable asset with sufficient liquidity can be added to the Aark pool to generate yields. This encompasses aUSD tokens and Aave USDC pool tokens, which users receive upon lending to Aave.
Any asset that’s looking for additional yields on DeFi? Aarkitecture is ready.