How will Arctic’s new innovation in DeFi space help Aurora’s Ecosystem

Aurora Labs
3 min readNov 3, 2022

What is Arctic?

Arctic is the next-generation ecosystem-DEX on Aurora. Arctic brings DeFi innovation to Aurora in the forms of the veNFT and DLAMM (Discretized Liquidity AMM).

In layman’s terms, Arctic is a new DeFi that allows users to swap or exchange tokens from Aurora, Arctic, USDT, NEAR and more. It doesn’t work on a traditional, regular AMM model to operate and access the liquidity. With Arctic’s new innovation — Discretized Liquidity Automated Market Maker (DLAMM) mechanism, this new model attracts and retains liquidity and provides 3500x higher capital efficiency than the mainstream x*y=k AMM model.

Why Aurora?

Aurora is an Ethereum Virtual Machine (EVM) built on Proof-of-stake based Layer1 blockchain — NEAR Protocol. Aurora enables dApps to scale with low gas fees ($0.2) and processing transactions in 2 seconds.

Aurora’s ecosystem has witnessed the quickest growth in the last months, with currently more than 100 projects and 100 relayer nodes. Now the next chapter of Aurora’s development will be improving on-chain liquidity and DAO governance.

How will Arctic leverage the Aurora ecosystem?

Aurora’s ecosystem has been growing tremendously, and with the addition of Arctic users can swap and stake their tokens in a new way to earn incentives. Arctic supports 10+ tokens — Aurora, NEAR, USDC, USDT, REF, ETH, ARC, and more.

Arctic will strengthen Aurora’s ecosystem with its innovation in DeFi, Swap and Farm, DAO, and more. Arctic’s new mechanism DL-AMM provides stability and attracts liquidity.

How is Arctic Swap different?

Usually, DeFi uses an AMM mechanism to empower their liquidity which is inefficient, but Artics has innovated and worked on Discretized Liquidity Automated Market Maker (DLAMM) mechanism, helping to maintain, attract, and retain liquidity.

Arctic’s DL-AMM model can provide 3500x higher capital efficiency than the mainstream x*y=k AMM model. The higher capital efficiency of Arctic’s DLAMM means it can generate more trading fees and a higher APR under the same TVL to attract and retain liquidity better.

With Dl-AMM, users can swap their token at the exact price, without worrying about the major slippage. DL-AMM cuts these price ranges into small narrow pieces, making these price ranges close to 0. DL-AMM allows Arctic to be more manageable in terms of liquidity and to support more trading methods, such as Limit Order.

What is Arctic Farm & How is it different?

Arctic Farm based on Arctic LP NFTs. Unlike the traditional V2 fungible LP tokens that are directly staked for mining, when designing the liquidity mining incentive plan in Arctic Farm, the protocol can clearly set the value range of the incentivized LP tokens.

About Aurora

Powered by its high-performance EVM, and fully trustless Rainbow Bridge, Aurora combines an Ethereum compatible experience with the modern blockchain performance of NEAR Protocol. Aurora provides an an optimal environment for the creation of scalable, carbon-neutral, future-safe, and low-cost Web3 services, as well as the perfect tools to bring to life your Web3 initiatives. Try Aurora Cloud, our all-in-one cloud solution for enterprises, and get your Web3 journey started!

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Aurora Labs

Aurora is a fully compatible EVM and a fully trustless bridge between the Ethereum, NEAR and Aurora networks.