Umami Finance Partners With Layer2DAO

Supporting the Arbitrum ecosystem.

Umami Finance is pleased to announce it is partnering with Layer2DAO to build & manage a new L2DAO-ETH trading pair on Uniswap v3 for the recently-launched Arbitrum-native decentralized investment fund.

The partnership enhances trading liquidity for L2DAO & marks the initial step in a planned long-term collaboration between the two projects.

In the coming weeks, Umami & Layer2DAO will work together to migrate TVL to Arbitrum, support the growth of the network’s ecosystem, & create new utility for the L2DAO, UMAMI & ARBIS tokens.

Layer2DAO is the first peer project on Arbitrum to deploy an LP to Uni v3 via Umami’s recently launched v3 LP management platform. The platform is playing a leading role in migrating Arbitrum liquidity to Uni v3 & generates an expanding stream of trading-fee revenue for Umami’s treasury.

“Umami’s partnership with Layer2DAO kicks-off a promising positive-sum relationship between the two projects, which both share a similarly bullish outlook on the future of Arbitrum & take a hands-on approach to supporting the ecosystem,” said DeFiAlpha, project lead at Umami Finance.

“It’s also an exciting proof of concept for Umami’s new v3 LP management platform. We believe that actively-managed, concentrated liquidity on Uni v3 can play a critical role in scaling trading liquidity for newly launched projects on the network,” he added.

Enhancing L2DAO Liquidity

Umami will pair 10 ETH of its protocol-owned liquidity with 3.7 million L2DAO tokens & deploy it into a newly created L2DAO-ETH LP on Uni v3. Umami’s v3 expert, Steven-T, will actively manage the LP to optimize trading liquidity & price stability for L2DAO.

Umami’s team has also deployed a new autocompounder on the Arbis Finance platform to attract additional liquidity to the L2DAO-ETH trading pair.

In exchange, L2DAO is providing the Umami treasury with 10m L2DAO tokens, including 3.7m deployed in the LP & an additional 6.3m timelocked L2DAO tokens to support long term alignment between the two projects.

Umami will also collect L2DAO incentive rewards equal to ~125% APR on its deployed LP assets (or ~250% APR on its ETH contribution). L2DAO will continue to maintain its own L2DAO-ETH LP on Sushiswap.

Future Collaborations

Layer2DAO & Umami are in active talks to expand their partnership on Arbitrum even further. Potential future collaborations include:

  • Cross-liquidity between the L2DAO, UMAMI & ARBIS tokens via additional trading pairs on Uni v3.
  • Collaborations on new Arbtitrum-native DeFi projects to enhance utility for both projects’ tokens & bring additional revenue to both of their treasuries.
  • Further UMAMI-L2DAO token swaps & collaboration on DAO governance.

“We are excited to be partnering with such a great team that has incredible depth. This is just the initial step in a much larger collaboration that will bring value to the Layer2DAO as well as Umami. It is these types of investments and collaboration that we continue to seek out to grow the ecosystem of the Layer 2 community,” said L2DAOtrain, Layer2DAO’s head of business development & treasury management.

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