Orca (ORCA): A DEX for People, Not Programs

Orca Is a Solana DEX for Everyone

While the first decentralized exchanges (DEXs) that became popular and widespread were built on Ethereum, the DEX trading ecosystem has expanded to include other blockchains, including Solana. Launched in February 2021, Orca is one of the earliest Solana DEX and automated market maker (AMM) platforms.

To avoid the inhibitive fees that can result from congestion on other blockchains, Orca co-founders Grace Kwan and Yutaro Mori envisioned a DEX that could offer low trading fees and more equitable access on Solana. Orca allows users to make quick, easy, and low-fee token trades, while also allowing its users to provide concentrated liquidity to the platform to earn a share of trading fees.

Newcomers to DeFi can find the whole process daunting. Another one of Orca’s goals was to make DeFi tools and protocols easier to use. The team placed a great emphasis on creating an accessible user experience (UX) for both mobile and desktop users. In addition, the Orca blog on Medium provides step-by-step guides for buying crypto, setting up a Solana wallet, and making your first trade on Orca.

Orca users can take pride in the fact that for every trade they make, a portion of the trading fees are donated to worthy causes. Soon after protocol launch, the Orca Impact Fund was established, with a mandate to donate a portion of the total funds in the Orca Treasury to charities committed to sustainability and fighting climate change. The recipients of the Impact Fund are determined by the Orca community.

Unlocking Deep Liquidity and Better Prices

Orca allows users to deposit liquidity into concentrated liquidity pools known as “Whirlpools.” Concentrated liquidity pools can be more-capital efficient than constant-product pools, giving LPs the opportunity to earn a higher yield on their capital, while providing better prices and less slippage to those making trades on Orca. The Whirlpools smart contract is open-source, and protocols that build on top of it can earn grants of up to $200,000 in ORCA through the Whirlpools Builders Program.

Orca also provides numerous features to enhance usability, one of which is the Fair Price Indicator. This feature flags trades that don’t fall within 1% of the current market price, as well as trades that will result in substantial slippage, with warning messages. Users can still execute the trade subsequently if desired, but make an informed decision to do so.

Orca Tokenomics

In August  2021, Orca launched a governance token (ORCA) with a hard-capped supply of 100 million. ORCA rewards are earned by liquidity providers (LPs) along with a share of trading fees. ORCA’s primary function is as a governance token that allows stakeholders to steer the project through voting rights.  Orca launched its first governance iteration in April 2022. Dubbed “Governance v0” to indicate its prototypical nature, it allows ORCA token holders to submit on-chain proposals to alter the protocol. Recently, the first governance proposal was passed, implementing a bug bounty to enhance the security of Orca’s smart contracts.