Arrakis Finance is one of the largest liquidity management protocols for leading DeFi projects. The team will launch its native token, $SPICE, and has confirmed an airdrop for the community. In this article, we will briefly explain what Arrakis Finance is and how you can position yourself for the airdrop.
Arrakis Finance ($SPICE) Airdrop Step-by-Step Guide
Here’s how to receive the $SPICE airdrop:
- Connect your wallet to Arrakis Finance
- Provide Liquidity to Vault
See below for more in-depth details!
What is Arrakis Finance?
Arrakis Finance is a liquidity management protocol used by leading DeFi projects to bootstrap liquidity for their tokens across multiple blockchains. Some of the top DeFi projects that have adopted Arrakis vaults include Aave, MakerDAO, and Synthetix. At its peak in July 2022, the platform had $1.83 billion in total value locked (TVL).
Arrakis aims to solve pain points that many projects in web3 are facing today. Traditional Uniswap v2 automated market makers (AMM) provide a one-size-fits-all liquidity solution. While being simple, they lack efficiency and are costly to subsidize liquidity programs. Next generation AMMs like Uniswap v3 provide liquidity efficiency improvements, however at the cost of added complexity and risk to liquidity providers (LP).
The multichain landscape made liquidity increasingly fragmented and the operational overhead of managing liquidity exponentially higher. Projects are forced to spend an unnecessary amount of time and resources on complex topics such as active liquidity management, cross-chain liquidity provision, and modeling expenditures on market making programs. Arrakis solves these issues by creating a curated marketplace of novel tokenized LP strategies that facilitate deep liquidity and optimize LP earnings.
Does Arrakis Finance Have a Token?
Yes, $SPICE is a token that Arrakis Finance uses to add transparent governance and new incentive mechanisms to its protocol. The Arrakis DAO manages its tokenized strategies with its curated list of automated strategies. The protocol takes a 25% commission on fees earned from all liquidity under management as protocol revenue.
Projects get optimized liquidity without the management overhead and access to liquidity gauge emissions of $SPICE. These emissions provide additional incentives for LPs and attract liquidity to vaults. They also double as a bootstrapping mechanism for distributing governance power over the Arrakis protocol by vote locking $SPICE for non-transferable $xSPICE.
Will there be a $SPICE Airdrop?
Yes, the Arrakis team has confirmed an upcoming $SPICE airdrop on Discord, and they will announce further details soon. Moreover, if you locked $GEL tokens as part of the Gelato Network Lockdrop Program between May and June last year, you will receive $SPICE airdrops when the token launches. The Gelato Network is a web3 automation network that helped incubate Arrakis Finance.
How to Get the $SPICE Airdrop?
The best chance to get the $SPICE airdrop is to provide liquidity on the Arrakis Vaults. The protocol is live on four mainnets: Ethereum, Polygon, Optimism, and Arbitrum. So you will need real funds to qualify for the $SPICE airdrop. Here’s a step-by-step guide:
- Connect Your Wallet to Arrakis Finance
- Provide Liquidity to Vault
Select a liquidity pool you want and deposit your token pairs. Each pool has different rewards and fee tiers.
If you want to minimize impermanent loss risk, stablecoin pair LPs are a safer choice.
When reviewing an airdrop, there are several factors to consider. First, the likelihood the project will even do an airdrop in the first place. Then, to look at how many tokens the project intends to allocate towards airdrop campaigns, as well as the difficulty in participating in their airdrop. It is also important to look at the utility of the token so that there will be an actual use and purpose in participating in the airdrop in the first place. Finally, a factor to consider when reviewing an airdrop is whether the airdropped tokens are subject to any lockup period.
Likelihood of Airdrop: The Arrakis team has confirmed on Discord that there will be a $SPICE airdrop. More details to be announced soon.
Airdropped Token Allocation: The token allocation for Vault liquidity providers is yet to be determined. However, those who participated in the $GEL Lockdrop Program last year will split the 30 million $SPICE airdrop pro-rata.
Airdrop Difficulty: The steps are straightforward. You just have to provide liquidity to the Arrakis Vault. However, keep in mind that real funds are used, as it is deployed on the mainnets.
Token Utility: $SPICE is the native governance token of Arrakis Finance that adds new incentive mechanisms to its protocol.
Token Lockup: The tokenomics of $SPICE is not yet finalized.