What are they?
What are Tempest's LST/LRT Arbitrage Vaults?
Tempest's Arbitrage Recapture Vaults are the first vaults to internalize the MEV created
when LSTs depeg, the most stressful time for LST/LRT Liquidity. Through knockout orders,
each knockout order is able to capture the Delta at which the orders are place from the peg.
This effectively creates an expendable buy wall that follows the peg of the LST/LRT. Tempest
is making LST/LRT
Liquidity great again, recapturing all the profit for LPs and helping Liquid Staking
Protocols push a new paradigm of liquidity returns previously only captured by active
arbitrageurs. The achieves all of this while still being able to facilitate the same swaps
that are possible through normal concentrated liquidity
Arbitrage Vaults maintain 2 positions:
Open position
As same as normal Concentrated Liquidity Position but only deploy on one side of the
current price (one side token)
Knocked-out position
Position to capture the profit when LSTs depeg and will be send to withdrawal queue
as soon as possible to re deploy into the vault
How do they work?
How do they work?