Sei, the fastest Layer 1 and fastest chain to finality, is partnering with White Whale to provide tooling and infrastructure for on-chain arbitrage. White Whale aims to defragment liquidity by establishing cross-chain liquidity pools to encourage arbitrage with local DEXs, such as SushiSwap on Sei. White Whale’s liquidity pools will function as bot-focused AMMs, allowing their open source trading bots to arbitrage with local DEXs.
White Whale’s mission is to empower retail users and redistribute market influence from centralized entities to retail communities. This aligns with Sei’s broader mission of promoting the growth and scaling of DEXs through widespread adoption.
Currently, there are a few key bottlenecks preventing DEXs from truly scaling on-chain. Liquidity is fragmented across L1 blockchains (e.g., Cosmos, Osmosis, Secret, etc) and across their constituent DEXs (e.g., Astroport, Terraswap, Loop, Phoenix). Fragmented liquidity causes poor swap performance (price discrepancies/high slippage) and may even halt entirely when liquidity pools are drained or severely imbalanced. Ultimately, fragmented liquidity hinders performance and user experience.
What will this partnership solve?
1. Market Inefficiencies — Fractured Liquidity, Price Disparities
Fragmentation of the available liquidity results in shallow pools with high spreads when swapping large amounts; in the worst case, failure to execute due to no liquidity. Widespread adoption of the interchain future requires stable, reliable swaps on each constituent chain.
2. Capital Inefficiencies — Idle Arbitrage and Liquidation Capital
Every arbitrageur and liquidator will need their own capital sitting on every app chain locally to efficiently arb a local dex or to liquidate borrowers. When there are no arbs or liquidations, the capital is idle and not earning yield.
3. Centralized Market Making — Capital Barriers, Knowledge Barriers, Trust
There is a large asymmetry of information in crypto which makes profiting from arbitrage and liquidation exclusive to top developers.
White Whale will provide relevant infrastructure to allow anyone to participate in arbitrage, liquidations, and market making. Users and traders benefit from stable and efficient markets that are more robust than if a few entities controlled the system. White Whale infrastructure is an ally to DEXes by improving price stability between blockchains and direct bot traffic to DEXes which increases volume and liquidity.
Sei is committed to providing best-in-class infrastructure to develop and scale DEXs protocols across Web3. Sei is the fastest L1 and the fastest chain to finality in Web3. Sei’s remarkable throughput coupled with its CLOB (Central Limit Order Book) module has revolutionized the capabilities and possibilities for on-chain DEXs. Sei is opening doors to new types of financial products and enabling custom UX improvements such as near zero transaction fees and paying gas with different tokens.