🐝Volatility Farming

The only constant in the market.

The Mechanics of Volatility and Arbitrage

Volatility farming exploits market price differences when the price of an original asset diverges from its synthetic counterpart (Den); arbitrageurs—primarily MEV bots—step into profit by buying the lower-priced asset and selling the higher-priced ones. brTOKENS represents liquid receipts of assets within the Den, which is fully backed by TOKENS (the main asset). Users can easily purchase TOKEN, wrap it into brTOKEN, and sell it. Alternatively, they can buy brTOKEN, unwrap it back into TOKENS, and sell, taking advantage of arbitrage opportunities.

Key Features:

1. Asset Creation (Dens)

   Arbera enables the creation of arbitrage markets using wrapped versions of any token, known as Dens, in the Arbera ecosystem. Each Den tokenbrTOKEN (receipt token) is fully collateralized 1:1 by its corresponding original assetTOKEN

   • Conversion: Users can convert their brTOKENS into the original asset at any time, ensuring that the value of Den tokens remains closely linked to the value of the underlying assets.

   • Yield Generation: Dens generate a yield from every trade, benefiting users who hold brTOKENS.

2. Single-Sided Token Wrapping

   Users can wrap their TOKEN into its synthetic version (brTOKEN) through the Den.

   Example:

   • Wrapping BERA: Create a synthetic version of BERA (e.g., brBERA) and mint correspondingbrBERA tokens.

   Benefits:

   • Yield Farming: Simply by holdingbrBERA, users benefit by farming the growth of the underlying TOKEN through the volatility farming protocol.

3. Liquidity Provision

   • Users can provide liquidity for Den pairs on Kodiak, such as brTOKEN-HONEY or BERA* pairs.

   • Volatility Rewards: Earn rewards viabrTOKENS (e.g.,brBERA).

   • Protocol-Generated Fees: Accumulate fees via the ARBERA token through buybacks generated from volatility farming, earn Bera Governance Tokens (BGT) via Validator Vote Gauging, and other ecosystem token rewards.

*Note: Liquidity can also be provided for other approved and whitelisted paired assets.