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Future of Decentralized Exchanges and Yield Farming on Arbitrum

Oscarswap Decentrlized Exchange

The OscarSwap DEX can benefit three types of users:

  1. liquidity providers, who own Oscar Pools or participate in shared pools

  2. traders, who purchase and sell the underlying pool assets on the open market.

  3. Stakers, who are searching for yield farms that provide diversified returns.

A liquidity provider might be anyone. As an example: portfolio managers who wish to have a managed exposure to various assets without the hassle and expense of rebalancing. Or investors with tokens lying idle in their wallets who want to put them to work earning passive revenue from fees. Or Stakers who plan to multiply their investment with auto-compounding, instead of leaving their crypto in their wallets. Nevertheless, this is not the only utility of the staking pools. A staker is also eligible for a regular staking pool with a flexible locking period.

Traders may pick from a variety of pools, each with its own set of investment possibilities due to its unique configuration of tokens, weights, and fees. The interaction of these parameters, pool volume, and external pricing creates market dynamics that drive traders to keep token ratios steady, protecting asset value for liquidity providers.

There are four major types:

  • Traders aiming to swap tokens at favourable prices with less slippage

  • Arbitrageurs strive to benefit by balancing market inefficiencies between DEXs and CEXs.

  • Stakers in search of high yielding farming pools for diversified returns

  • Ethereum smart contracts are looking for liquidity for a number of reasons, including liquidating holdings on other protocols, trading on behalf of customers, and so on.

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