Empowering Aark Digital with Keyrock — Partnership Overview
A few weeks earlier, we announced that Aark Digital successfully secured its seed round with prominent backers of the Web3 ecosystem — Delphi Digital, OKX Ventures, Big Brain Holdings, and Keyrock.
As much as our investors’ perspectives are aligned with the future that Aark Digital will bring forth, they will provide various support for the investment and the product development side.
Especially, Keyrock, a global leader among market makers, has decided to be part of Aark Digital’s journey as a part of its goal to pave the way for the broader adoption of tokenized assets.
As such, in today’s post, we’d like to introduce a general overview of the partnership between Keyrock and Aark Digital.
Keyrock is a digital asset market maker that enables more inclusive and efficient markets. With their proprietary algorithmic technologies, they provide scalable and adaptable liquidity solutions for marketplaces and asset issuers alike. Keyrock is active on 85+ centralized and decentralized trading venues and offers services like on-chain liquidity provision, market making, OTC, and venture investments. Keyrock was founded in 2017 in Brussels but has since set a base in London and is rapidly expanding globally. The company counts Ripple, SIX Fintech Ventures, and Middlegame Ventures as investors.
For more information, visit keyrock.eu
1. On-chain Market Making
The distinctive nature of Aark Digital from its peers derives from the mechanism to balance the ratio of open interests(OI) by implementing the ‘Streaming Funding Fee’ that imposes funding fees just as in CEXs. This architecture incentivizes funding fee-seeking arbitragers to balance OI at 50:50; subsequently, it increases the safety of the LP pool, which, in this case, will only take on PnL of the OI imbalances, i.e., 2% of PnL if long-short OI is 51:41.
As much as it’s pivotal for the growth of the exchange to have various parties deploying strategies to utilize the above mechanism, Aark Digital requires a reliable contributor to counterparty against skewed positions, even during a highly volatile market. This is where Keyrock’s brilliance steps in. Keyrock’s 7 years-long endeavours as a market maker and trading firm will stabilize the platform. Their contribution will be even more noticeable in balancing the OI of super-long tail asset markets that Aark Digital will support after the initial phase of the Open Beta.
2. Initial Liquidity Bootstrapping
The unique aspect of peer-to-pool Perp DEX is that it does not require an order book as in CEXs. Its beauty is that traders can access instant liquidity as they do not interact directly with each other but instead trade against a liquidity pool. Therefore, the key success of a peer-to-pool perp DEX originates from the sustainable volume of its LP pool.
Keyrock’s decision to participate in initial liquidity bootstrapping for Aark Digital aligns with its mission to provide liquidity to traders for tokenized assets. It also reflects that Aark Digital’s LP pool(ALP) model is beneficial for an institution to partake in the early phase.
Aark Digital is currently running Early Bird LP programs to reward early contributors.
For more information on Early Bird LP, please refer to our previous post.
3. Financial Expertise & Insights
Based on a vast period of experience in the DeFi market, Keyrock’s expertise will propel Aark Digital’s business.
Trading Insights and Statistics
Keyrock is a team of highly-skilled traders who can provide meaningful insights to build a better trading UX at Aark Digital. Considering that numerous DeFi platforms are created by post-trading teams, this is an exclusive advantage that Aark Digital can leverage.
Accessibility to Extensive Network
Aark Digital aims to be a decentralized financial hub where all tokenized assets are tradable. The most significant step towards the mission is to build money-lego with various DeFi projects that are suitable for integration with Aark Digital’s unique structure.
Our new partnership with GMD Protocol was part of these milestones.
With access to Keyrock’s extensive network that’s been built over the past 7 years, Aark Digital will further engage with collaborative partners to create a virtuous cycle between protocols and their users.