Clearing Layer

The Clearing Layer finalizes the arbitrage process by rebalancing the liquidity pools if needed after trades are executed. It ensures optimal liquidity distribution across pools and facilitates the allocation of profits to users.

Soft Rebalance

Arbix employs a soft rebalance strategy within its liquidity pools. This approach allows for flexibility in rebalancing, meaning that it's not always mandatory to rebalance immediately after each trade.

Arbitrage Engine recognizes that market conditions may shift, and sometimes it can be more advantageous to let the pools remain unbalanced temporarily, as market dynamics might naturally correct the imbalance.

This strategy helps in optimizing the overall performance of the liquidity pools, avoiding unnecessary transactions, and potentially enhancing profitability by allowing for organic adjustments.

Yield Distribution

As mentioned, Arbix converts users' deposited assets into yield-bearing tokens, which are wrapped representations of their deposits. These tokens not only represent the users' share of the liquidity pool but also generate real yield from Arbix’s arbitrage activities.

The net profit from Arbix's arbitrage activities, after deducting performance fees necessary to sustain the protocol, its infrastructure, and operational expenses, is distributed among holders of the yield-bearing tokens. Each holder’s share of the profits is determined by the amount of liquidity they contributed relative to the total liquidity pool. As profits are generated, the value of these yield-bearing tokens increases, reflecting the accrued yield.

Yield-bearing Tokens represent real yield because they are acquired from on-chain. Users can choose to hold onto their yield-bearing tokens to continue earning yield or redeem them for the underlying assets at any time, with the tokens reflecting the accrued yield.