Orca’s Whirlpools Builders Program Wave 1 provides an exciting opportunity for Tulip Protocol to expand our product suite across the Solana DeFi ecosystem. We are honored to be a part of Orca’s efforts to develop innovative products.
What is Orca
Orca is the simplest DEX for exchanging cryptocurrencies on the Solana blockchain. On Orca, you can trade cheaply, quickly, and with confidence. In addition, you can provide liquidity to liquidity pools, including centralized liquidity pools (Whirlpools), to earn fees and revenue.
"Orca's goal is to provide infrastructure that makes it faster, easier, and more user-friendly for anyone to build web3 applications. To this end, the protocol is committed to supporting developers who demonstrate a willingness to build, ship, and embrace the open source ethos."
—— Orca co-founder Ori Kwan
New Farm
Tulip Protocol has partnered with Orca to build a centralized liquidity treasury strategy to reduce impermanent loss as well as automatically compound rewards.
The vault includes a hybrid automatic compounding and rebalancing strategy that allows grouping user deposits into selected quote ranges. This combines compounding of predefined liquidity provision rewards and price/quote range management.
We have also added a new feature "Autoswap" powered by Jupiter Aggregator in the backend. This will allow users to deposit uneven assets into LP, and our backend will automatically swap to achieve balance before creating LP, without the need to navigate to AMM. With this vault, users will experience a one-click process and enjoy sustainable returns.
https://solscan.io/tx/xdqz7CDKheVVUK3Ljp5BJoB7mHQLBj1ePwZxfWT33EmjJ1Bdn4CgKuVJGjVpz8JUjoUnWhM3Z97jsKzU87Acs9n
How these work
If the actual price of a trading pair exceeds a threshold within a given price/pip range, the vault removes liquidity until the next phase. This allows the strategy to manage impermanent loss, which is a problem with concentrated liquidity pools, especially when one of the paired assets is volatile.
It is important to understand the different types of concentrated liquidity strategy vaults and how to manage them. There are three main types of vaults: stable, relatively stable and unstable, each with its own different risks.
Pure stablecoin vaults (low risk): Both paired assets are stablecoins. This category includes pairs such as USH/USDC, USDH/USDC, USDT/USDC, UXD/USDC, etc. Pure stablecoin vaults are usually managed using strict strategies that rebalance positions once the current quote index changes from the previous quote index.
More Stable Vault (Medium Risk): Theoretically traded/pegged to a price ratio similar to a stable swap, but the price of the paired asset is not stable. This category includes trading pairs such as SOL/stSOL, SOL/mSOL, etc. This vault is usually managed using a midpoint strategy, where a rebalancing position is created when the quote index changes by more than 50% relative to the quote index that was active at the time of the position.
Volatile vaults (high risk): Only one asset is a stablecoin, or the prices of both paired assets are unstable. Including trading pairs such as SOL/USDC, SOL/DUST, etc. Volatile vaults are usually managed using a variable strategy, which rebalances positions when the current quote index changes by more than a certain set value or more from the quote index that was active when the position was held.
Tulip Protocol is excited to be working with Orca on centralized liquidity vaults, so stay tuned for more of your favorite Whirlpools coming soon!
