Social EGP 32 - On-chain Market Making for CLEAR - Arrakis PALM migration to Arrakis PRO + TVL Topup

In reference to the previously approved proposal from Arrakis ([Closed - RFC] On-chain Market Making for NEXT - Arrakis PALM 1) - the Arrakis Team suggests migrating the vault to the latest version of Arrakis (Arrakis PRO) and adding additional 7.5M CLEAR tokens to the vault.

PALM Vault Summary

Since January 23rd 2025 (and previously for the $NEXT token), Arrakis has been in charge of on-chain market making on Uniswap V3 for the $CLEAR token by the Everclear DAO via the Arrakis PALM automated liquidity management system. With the launch of Uniswap V4, Arrakis has developed a new system, called Arrakis Pro, that supports latest DEX designs, Uniswap hooks and more advanced LP strategies.

Currently, the Everclear DAO holds a liquidity position of ~$833k USD TVL with Arrakis PALM (~14,398,610 CLEAR tokens and 97.66 wETH) that are used for deep liquidity management on UniswapV3 for the CLEAR/wETH 1% liquidity pool 1.

Throughout all market cycles, the Arrakis PALM vault has actively managed the CLEAR/wETH liquidity in the vault and decreased price impact for trading both $CLEAR and $wETH in the pool for the community. Further, >99% of on-chain $CLEAR volumes on Ethereum have been facilitated via the Arrakis vault, showing the importance of the Uniswap pool and Arrakis vault for the DAO. More insights on the vault can be found here.

Proposal to the DAO

1. Liquidity Migration to Arrakis PRO: Arrakis proposes to the Everclear DAO to migrate its current liquidity in Arrakis PALM to Arrakis PRO to benefit from the latest developments. Additionally, the new Arrakis PRO solution can deploy funds into an actively managed dynamic fee hook on Uniswap V4, as soon as it becomes available. This dynamic fee hook adjusts trading fee dynamically based on price volatility and volume and thus is able to protect capital from arbitrage and LVR (Loss-vs-Rebalancing). Until this hook runs in production, Arrakis suggests deploying the liquidity to a vanilla Uniswap V4 pool on the 0.85% fee tier to maintain the DAOs capital sustainability.

2. Liquidity Top-up via treasury CLEAR tokens: Arrakis has in the past significantly bootstrapped the vault’s liquidity to 50:50 inventory and we want to propose to continue this liquidity bootstrapping operation for the DAO without any negative market or price impact.

Current TVL inventory ratio of the CLEAR/wETH Arrakis vault

To deepen the buy-side liquidity for $CLEAR tokens and significantly reduce the price impact for anyone purchasing $CLEAR tokens, we propose to increase the liquidity budget for Arrakis by additional 7.5M $CLEAR tokens to the Arrakis PRO vault.

Benefits of the migration to Arrakis PRO for Everclear

• Advanced flagship strategies: Arrakis Pro on Uniswap V4 leverages our most sophisticated and battle-tested liquidity management algorithms designed specifically for the V4 infrastructure.
• Superior capital efficiency: Our refined strategies enable significantly tighter price ranges and more precise positioning, maximizing your capital utilization and potential returns.
• Future-ready infrastructure: Position yourself to automatically benefit from upcoming innovations, including our dynamic fee hook that reduces toxic order flow and other advanced features as they launch.
• Advanced DEX Design: Benefit from deploying capital to the latest DEX design of Uniswap V4, with customized fee tiers, singleton contract design and the support of native ETH.

Migration Guide

Arrakis offers a seamless migration process: Vault owners simply sign one bundled atomic transaction to complete the entire migration with zero downtime, ensuring continuous liquidity provision throughout the process. Specific steps to be taken by the Everclear DAO delegates and signers on the DAO’s multisig safe.

• Coordinate your signers: Ensure all SAFE signers are available within a 20-minute window to authorize the migration transaction.
• Access Arrakis Pro: Navigate to the Apps section in your SAFE interface and search for “Arrakis Pro” to launch the migration tool.
• Execute migration: Click “Migrate” and follow the guided steps to complete the atomic transaction process.
• Confirm completion: Please notify our team once the migration has been successfully completed so we can verify the transition and provide any necessary support.
• Update DAO reporting: Update the reporting dashboards and statistics for the DAO community. Dashboards on Arrakis PRO over more insights on the liquidity management and the performance KPIs.

Voting and Implementation Procedures

The vote will follow the Approval Voting methodology.

Each user can select (approve) any number of choices. Each selected option will receive equal voting power. For example, if a user selects two choices, each one will receive the full voting power of that user.

To be considered approved, an option must reach the 15M vote threshold required for non-constitutional proposals.

Regarding implementation, it’s important to note that both the migration and the potential top-up (should both be approved) will be the responsibility of the Security Council. Therefore, this vote is categorized as a Social vote.

Reference

For more information regarding Arrakis and Arrakis PRO, feel free to have a look at our docs and join our community. I’m also more than happy to respond to any comments here from the Everclear DAO community about this migration proposal:

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