Archer Network Overview

Archer Team
Nov 10, 2020 · 3 min read

How Miners, Suppliers and Liquidity Providers work together

Archer boosts miner revenue through its network of suppliers and liquidity providers. Together, network participants prosper:

  • Miners earn more and better revenue with a five-minute integration. Read more about the benefits to miners and the application layer in our introductory post.
  • Suppliers source profitable opportunities for the network and earn a share of the extra revenue they discover.
  • Liquidity Providers (LPs) earn yield for bankrolling suppliers in a gas-efficient manner.
Archer crowdsources and executes the best transactions for miners

Growing the Network of Highly Specialized Suppliers

Today, the network runs with a single supplier and LP. The current supplier (a dex arbitrage bot) provides coverage for only one out of many profitable strategies.

We are currently onboarding the first external suppliers. These early integrations form the foundations to support more strategies and more suppliers, which we expect to grow network revenue.

Suppliers tend to be highly specialized and use sophisticated techniques to dominate their individual strategies. Often, suppliers are professional teams consisting of developers and analysts with extremely specific areas of expertise, domain knowledge and technical skill sets.

The network, through its governance structure, must determine how to effectively choose and manage suppliers.

Liquidity Providers Fund Strategies

The Archer network uses liquidity providers to fund suppliers’ strategies.

Archer LPs deposit assets to generate yield. Suppliers may use these assets to make gas-efficient transactions, plus avoid risk-mitigation strategies associated with holding and using volatile assets. In other words, deposits of different currencies save suppliers the fees of unnecessary asset swaps.

LPs improve the network’s profitability. Their deposits make supplier transactions more efficient and allow suppliers to carry out more advanced strategies. For example, liquidity providers could be used to bankroll strategies over longer periods than a flash loan.

However, there are two fundamental characteristics of liquidity that work against network profitability:

  1. Liquidity is promiscuous. Depositors optimize yield by perpetually following the best risk-adjusted returns across networks.
  2. Liquidity has diminishing marginal utility. Once a base level of liquidity exists, additional liquidity does not add as much value to the network.

The network, through its governance structure, must determine how to balance the needs of suppliers against the cost of incentivizing liquidity.

Kickstart Archer using Participation Incentives

Half of the ARCH token supply has been set aside for network participants. The treasury is owned by the network through its governance structure.

The initial purpose of this treasury is to start a flywheel effect where more and more effective suppliers bring more miners which increase LP yield and deposits, which in turn makes suppliers more effective, creating a positive feedback loop.

The network, through its governance structure, must determine how to distribute and configure rewards from the DAO Treasury.

Join our Community

We look forward to productive discussions about managing the network, leading to tangible outcomes from governance processes.

We are currently working to expand the network by including more miners and suppliers. If you are interested in joining the network, please book an intro call and join our community.

Mine Smarter

Archer boosts miner revenue with a five-minute integration. Live now on Ethereum. Visit our website and join Discord to learn more.

Archer DAO

Mine smarter

Archer DAO

Mine smarter. Trade smarter. Archer DAO boosts miner revenue and optimises the trader experience by reordering transactions on Ethereum. Learn more at https://archerdao.io

Archer Team

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Archer DAO

Mine smarter. Trade smarter. Archer DAO boosts miner revenue and optimises the trader experience by reordering transactions on Ethereum. Learn more at https://archerdao.io