The Whirlpools Closed Beta is now live!
Concentrated liquidity has arrived on Orca: SOL/USDC, mSOL/USDC and ORCA/USDC Whirlpools are now open to holders of Orcanaut NFTs!
Concentrated liquidity has arrived on Orca: The Whirlpools Closed Beta is here!
Unlike liquidity pools in most AMMs in DeFi, Whirlpools allow LPs to concentrate their liquidity around a chosen price range. This creates more efficient markets, with better rates for swaps and higher yields for the best LPs. (To learn more about the risks and rewards of Whirlpools, check out our announcement Medium post.)
About the Beta
The Closed Beta begins now and lasts for approximately 2 weeks. Rewards will begin 24 hours later on March 24. Liquidity provision in Whirlpools is gated to members of the Orcanautical Community, which is what we call holders of our Orcanaut NFTs. If you haven’t adopted one yet, nab a ‘naut on Magic Eden and join the #orcanautical channel in our Discord!
Three Whirlpools are currently available to beta users: SOL/USDC, and mSOL/USDC, ORCA/USDC. For the time being, the existing Orca pools for these pairs will not be affected, and swaps will be routed to whichever pool provides better rates (no Orcanaut required). We’re also excited to launch the first liquidity mining program for concentrated liquidity pools — mSOL/USDC will earn dual emissions (MNDE & ORCA), while SOL/USDC and ORCA/USDC will earn ORCA rewards. For more details on these pools, read our latest Aquafarm Rotation here!
Making your first deposit
We’ll be up-front here: How to optimize yield on a concentrated liquidity AMM is an unsolved problem. However, that also represents an exciting opportunity for the LPs, who may earn higher yields with less liquidity. And thanks to Solana’s low fees, there’s no need to deposit an ocean of liquidity to balance out the fees: Just a few dollars is enough to get started!
To make things easier, there are two pre-set price ranges to choose from when depositing liquidity. One range will provide liquidity across a broader range; the other will be more narrow and require more frequent rebalancing.
LPs may also choose to set a Custom range. Using this option, LPs can set any price range they’d like.
However, note that deposits in Whirlpools only earn yield when the pair is trading within the position’s associated range. Certain LPs may deliberately choose to create limit orders by creating positions outside of the current range; however, those positions will not earn any rewards unless the pair’s price enters that range.
Managing concentrated liquidity is a fine art, and a liquidity provider’s first deposit may not generate massive yields. But with the lower barrier to entry, users will be able to experiment with a wide variety of strategies and “learn the art” of liquidity provision, creating a more open playing field for market making on Solana.
What’s on deck for Whirlpools
Once the beta is over, we will gradually migrate more of our existing pools to Whirlpools. With each new Aquafarm rotation, look forward to a selection of new Whirlpools. Which ones? Whichever are the best candidates for concentrated liquidity, which will be determined based on market capitalization, volatility, and trading volume.
Plus! We’re building the rails for any of our podmates to list custom Whirlpools in a permissionless manner, as well as additional features that will make it easier to manage positions.
We’re constantly working to improve Orca for our pod, and we’d love to learn about your experiences with Whirlpools during the beta: What’s intuitive, what’s not, and how you think we can make Whirlpools better. We’ll be publishing a full survey at the end of the beta. In the meantime, join the #orcanautical channel in the Orca Discord (you’ll need an Orcanaut to join!) to share your feedback. We’ll be waiting on board!
Disclaimer: The content of this communication is not financial advice and should not be relied on by any persons as financial advice. This communication has not been provided in consideration of any recipient’s financial needs. We have not conducted any financial assessment based on the personal circumstances of any recipients. Before using the protocol, carefully review all relevant documentation and consider risks including total loss of funds.