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DEFI<br />
Lark Davis<br />
For anyone who is not familiar, what is Orca?<br />
Orca is a DeFi protocol on the Solana blockchain<br />
that allows users to trade tokens and provide<br />
liquidity on an autonomous basis with ease and<br />
efficiency.<br />
Diving a little deeper, Orca offers a<br />
concentrated liquidity AMM (Automated Market-<br />
Maker), Whirlpools, with an open-source, doubleaudited<br />
smart contract. Built from the ground up<br />
with a focus on intuitive, human-centric design, Orca<br />
enables any protocol in Solana to easily bootstrap<br />
their own token economy, including custom liquidity<br />
pools and liquidity mining.<br />
What does the ORCA token do?<br />
ORCA is the governance token for the Orca<br />
protocol. ORCA tokenholders control Orca<br />
by proposing and voting on matters in Orca<br />
Governance v0!<br />
Can you tell us about Whirlpools? Both the risks<br />
and opportunities!<br />
Whirlpools are concentrated liquidity pools on Orca.<br />
On most AMMs in DeFi, liquidity providers (LPs)<br />
facilitate trades at any price. For example, LPs for<br />
a SOL/USDC pool would facilitate trading for SOL<br />
from $0 to infinity.<br />
While this model is simple, it is not capital efficient.<br />
Thinner liquidity spread across the price curve<br />
translates to higher slippage for traders and lower<br />
yields for liquidity providers.<br />
Whirlpools solve this problem by empowering LPs<br />
to choose what price ranges they will facilitate with<br />
their capital. LPs concentrate their liquidity in the<br />
ranges they expect the price of the token pair to<br />
move within, enabling better prices for those token<br />
pairs.<br />
However, providing liquidity in Whirlpools is a<br />
competitive, skills-based exercise. Savvy LPs who<br />
choose more accurate price ranges (which we<br />
affectionately call “sharks”) will earn a higher share of<br />
fees and rewards. However, the potential for higher<br />
earnings comes at the risk of increased divergence loss,<br />
encouraging capital-efficient provision of liquidity.<br />
The ORCA token is used as a reward in pools, but<br />
how sustainable is this long term?<br />
Thanks to the capital-efficiency of Whirlpools, sharks<br />
with strong LP strategies can earn high yields from<br />
trading fees alone. This has reduced the need for<br />
additional token rewards to incentivize liquidity<br />
provision, enabling ORCA rewards to be steadily<br />
reduced over time. In fact, several Whirlpools on<br />
Orca feature no ORCA rewards at all!<br />
How prepared is Orca to survive the bear market?<br />
In the wild, orcas are apex predators that live in a wide<br />
range of environments. The Orca protocol, too, is wellpoised<br />
to use this bear market to its advantage.<br />
The original contributing team raised over $18 million in<br />
a private fundraise in September 2021 to continue<br />
developing Orca, placing them in a better position<br />
than competitors that may be forced to raise in a<br />
bear market. Development of Orca has continued en<br />
force over the past few months and shows no signs of<br />
stopping. New releases are on the horizon, including<br />
Community Listings, which will enable anyone in the<br />
Solana ecosystem to launch custom Whirlpools via a<br />
convenient UI.<br />
Who are the founders and why did they decide to<br />
build Orca?<br />
Orca was founded by Grace “Ori” Kwan (@oritheorca),<br />
who has a background in computer science and
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