Vault
Maximizing Market Inefficiencies
The Fluxtra Arbitrage Pool enables users to deposit their assets (e.g., OM) and take advantage of arbitrage opportunities between liquid staking derivatives (LSDs) and their underlying assets. By utilizing market inefficiencies, the pool increases value over time while ensuring full exposure to the underlying asset and aggregating rewards in ftOM.
How Arbitrage Works in Fluxtra
When users need instant liquidity for their staked assets, they often use a DEX swap, which typically incurs a 1-2% premium. However, users who wait for the 21-24 day unbonding period can avoid these costs entirely.
Fluxtra capitalizes on this price discrepancy by executing slow-burn arbitrage trades every 21-24 days, generating yield while keeping the pool’s assets fully utilized.
Liquidity States in the Arbitrage Pool
Funds within the Fluxtra Arbitrage Pool exist in four states:
Available Assets – Liquidity ready for arbitrage execution.
Locked Assets – Funds queued for withdrawal by users (subject to unbonding periods).
Unbonding Assets – Assets in the unbonding phase from a liquid staking provider. The dApp will provide on-chain transparency on these funds.
Withdrawable Assets – Funds that have completed unbonding and can be moved back into the arbitrage pool.
Execution Process
Static Execution Model (Launch Phase)
Initially, arbitrage execution follows a fixed utilization model, where different percentages of the pool are allocated based on the arbitrage opportunity:
0.5% Profit
10% of the pool
1.0% Profit
40% of the pool
1.5% Profit
70% of the pool
2.0% Profit
100% of the pool
Dynamic Execution Model (Post-Launch)
A more adaptive execution model will later be introduced, ensuring:
Arbitrage yield must exceed staking APR to remain profitable.
Opportunities below 0.5% will not be executed.
75% of the pool will remain in unbonding, ensuring a continuous flow of capital.
Market indicators (EMA, peak trading volumes, liquidation risks, and asset volatility) will refine execution efficiency.
Withdrawing Liquidity
Since assets in the Fluxtra Arbitrage Pool are actively traded or unbonding, withdrawals take longer than standard unstaking periods.
For OM, the unbonding time will initially be set at 25 days. After this period, users can claim their funds.
If immediate withdrawal is required and liquidity is available, users can withdraw instantly for a 2% pool fee + 0.1% protocol fee.
If withdrawing unbonding assets early, the fee is applied linearly based on the remaining unlock period.
Performance & APY Model
Unlike yield farming models, the Fluxtra Arbitrage Pool generates APY purely from arbitrage opportunities, making it independent of incentive-based rewards.
Historical data suggests arbitrage opportunities of 1-2% every 21-25 days, leading to potential APYs of 18.9-33.5%. The actual APY varies based on market inefficiencies and liquidity availability.
Estimated APY Based on Market Conditions
0.5%
4.7%
5.3%
6.3%
7.6%
9.1%
1.0%
9.5%
10.9%
12.9%
15.6%
18.9%
2.0%
19.8%
22.9%
27.2%
33.5%
41.1%
3.0%
31.0%
36.1%
43.3%
54.0%
67.2%
4.0%
43.0%
50.5%
61.2%
77.3%
97.7%
5.0%
56.1%
66.3%
81.1%
103.9%
133.5%
Why Use the Fluxtra Arbitrage Pool?
Automated Arbitrage Execution – No need to manually monitor price discrepancies.
Faster than Manual Trading – Automated systems execute arbitrage instantly, preventing missed opportunities.
Fair Profit Distribution – All users in the pool share arbitrage profits, instead of just the fastest traders.
Instant Liquidity for LSDs – Liquid staking token holders can swap via the pool at a fixed rate.
Tax Efficiency – In some jurisdictions, using an auto-compounding LP model reduces taxable events compared to frequent manual swaps.
Withdrawals & Immediate Exit Fees
Standard Withdrawal – After 25 days, funds become available for withdrawal.
Instant Withdrawal – Users can exit early for a 5% fee (linearly reduced based on remaining unbonding time).
Fee Structure
The Fluxtra Arbitrage Pool distributes profits fairly while remaining highly competitive in the DeFi space.
Deposit Fee: 0%
Performance Fee:
5% to ftOM holders
5% to Protocol Treasury
Withdrawal Fee: 0.5% (Shared with ftOM holders)
By utilizing Fluxtra’s Arbitrage Pool, users can passively earn yield through market inefficiencies, benefiting from an automated, decentralized, and fair trading environment. 🚀
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