Arbswap Use Cases
Arbswap is a decentralized exchange on Arbitrum One and Arbitrum Nova. A swap fits a need for another token, liquidity provision creates a pool position that can earn trading fees and farming adds incentives for eligible liquidity provider (LP) tokens staked in a matching farm. The selected network and any lock terms affect which action fits.
Action and Outcome
| Task | Input and Responsibility | Result to Confirm | Constraint or Alternative |
|---|---|---|---|
| Change tokens on one network | The participant selects the input asset, output asset and network, using an available pair. | The chosen output token after the swap is processed. | Execution depends on available liquidity and exchange terms. A cross-network route is relevant when the destination network must also change. |
| Supply pool liquidity | The provider supplies the assets and amounts accepted by the chosen pool. | Arbswap Liquidity Provider (ALP) tokens representing a proportional share of pooled assets. | The position retains exposure to the underlying assets. Pool-fee income depends on trading activity; a swap fits the simpler goal of acquiring a token. |
| Enroll liquidity in a farm | The provider selects a farm that accepts the particular LP token on that network and checks its reward and lock terms before staking the LP tokens. | A recorded LP stake in the matching farm. | LP ownership alone does not enroll the position. Keeping LP tokens outside a farm avoids that farm’s staking commitment. |
| Exchange and move assets between One and Nova | The participant selects an available route for the source asset, destination asset and destination network. | The intended token delivered on the selected destination network. | The route must support those assets and networks. A same-network swap is sufficient when network movement is unnecessary. |
Pool Exposure and Farm Participation
Pool trading fees and farm incentives reward different contributions. Liquidity supports swaps in the pool; farm rewards depend on an eligible position being staked under the program’s terms. Additional ARBS rewards do not guarantee that a position will outperform holding its underlying assets.
Arbswap’s Nova farming guide, published on November 8, 2023, separates obtaining LP tokens from enabling a matching farm and staking them. An LP balance establishes a pool share, while a recorded farm stake establishes participation in that farm. The LP token must match the farm’s accepted asset and network.
How Much of an LP Holding Is Farmed?
A hypothetical provider wants farm participation for an entire LP holding. Assume a farm accepts the holding’s ALP token and has an active incentive program. Total LP holding: 972 ALP units; amount staked in that matching farm: 324 ALP units. Both amounts are hypothetical.
The amount outside the farm is
total_alp - staked_alp
:
972 - 324 = 648
ALP units. Only one-third of the holding is staked. The other 648 ALP units still represent pool liquidity but are outside that farm’s incentive program. Enrolling the full holding would require staking another 648 ALP units, subject to eligibility and the farm’s position terms. A larger stake reduces that gap by the same number of ALP units; the reward value remains subject to the farm’s terms.
Lock Terms and Liquidity Access
Arbswap’s May 24, 2023 pre-TGE overview described flexible and locked farming on both networks, with higher farming rewards for longer locks. A need to redeem liquidity before a proposed lock expires makes that locked position a poor fit. An eligible flexible farm can be an alternative when its withdrawal rules permit the required timing.
Unstaking and removing liquidity have different endpoints. Unstaking releases LP tokens from a farm when the position’s terms allow. Removing liquidity redeems the pool share for underlying assets under the pool’s rules. A provider planning to recover the underlying assets needs to account for both stages when the LP tokens are staked.
Cross-Network Asset Needs
Cross-network swaps address a need for assets on another chain. Arbswap’s Symbiosis partnership announcement of May 26, 2023 specified Arbswap as the on-chain swap venue for Symbiosis’s Arbitrum Nova integration. The wider integration combines token exchange with movement between Arbitrum One and Nova, where a supported route is available.
ARBS transfers have a more specific documented option. Arbswap’s November 2, 2023 guide described an ARBS bridge between One and Nova using LayerZero’s OFT standard. That description concerns ARBS on those networks. For a cross-network task, completion means receipt of the selected asset on the destination network; authorizing or submitting the source transaction is an earlier stage.
Incentives for Gaming Projects
Gaming projects can use LP incentives to attract liquidity for their assets. Arbswap’s May 24, 2023 overview described project-hosted flexible and locked farming on One and Nova. The incentive program defines eligible positions and rewards, while the provider decides whether the asset exposure and commitment fit.
NFT farming was presented as a planned extension in that same overview, alongside flexible and locked farming that the document described as available. A project considering NFT rewards needs support for that reward type in the particular program; a gaming focus alone does not establish it.