Arrakis V1

Arrakis V1 runs tokenized vaults that manage concentrated AMM liquidity positions on Ethereum and Polygon. A depositor holds a managed two-token pool position that rebalances against traders, and concentrating the range makes the drift toward the weaker asset sharper, not smaller. That impermanent loss cannot be explained to a client in two sentences or defended after it bites, so the class rule rejects the whole category regardless of how well the vault is run. TVL was about $1.32 million at the 2026-08-15 survey. A product line without impermanent-loss exposure would reopen the file.

Review triggers: events that reopen the verdict
• Ships a product line without impermanent-loss exposure that merits its own review

Watched nightly: a warning on its venues or files, or a cited document that changes, reopens the memo. The first confirmation is due 2026-11-15.

The research file

Mechanism applicability

Arrakis V1 vaults are fungible ERC-20 wrappers over shared Uniswap V3 positions. Depositors mint proportional vault shares with both pool assets; swaps change the inventory held inside the range, while fees accrue to that same paired position. Tokenization and automated compounding do not change the underlying concentrated-liquidity claim, so the shared version-1 amm-lp dossier applies.

Current observation and lifecycle

The DefiLlama protocol API read on 2026-08-15 classified Arrakis V1 as a Liquidity Manager and reported approximately $1.32M: about $1.17M on Ethereum, $0.10M on Optimism and $0.06M on Polygon. Arrakis now describes Modular as the successor to its purpose-built V1 and V2 products, while maintaining legacy V1 documentation and code. The registry adds the omitted Optimism balance and treats this as a legacy, still-measured product.

Control, loss and exit applicability

A vault manager can call executiveRebalance to move ranges and is expressly a trusted party in the V1 design. Range management changes fee capture and timing but cannot prevent arbitrage from leaving LPs with more of the falling asset. A holder burns shares for its proportional underlying tokens and earned fees at then-current inventory; exit therefore realizes the AMM mix rather than restoring the original deposit pair.

Why the class rule decides

The protocol-specific evidence fits the amm-lp dossier directly: the client owns managed paired Uniswap V3 inventory, with manager discretion layered on top. Legacy status and modest size do not cure that fundamental loss path. Reopen only for a separately measured Arrakis product whose return does not require paired or synthetic market-making inventory, followed by a fresh control, incident, liquidity and alternatives review.

Sources

The claims above trace to these. Where a number could not be independently verified, the thesis says so.

• Arrakis — legacy V1 mechanism · primary · accessed 2026-08-15
  Supports: V1 vault shares, Uniswap V3, mint and burn, manager trust, fees
• Arrakis — V1 core repository · primary · accessed 2026-08-15
  Supports: ERC-20 vault, shared liquidity position, executiveRebalance, manager, Gelato
• Arrakis — Modular lifecycle overview · primary · accessed 2026-08-15
  Supports: V1 lifecycle, V2 lifecycle, Modular successor, Uniswap V3
• Uniswap — concentrated-liquidity position behavior · primary · accessed 2026-08-15
  Supports: price range, single-asset inventory, fees, concentrated liquidity
• DefiLlama — Arrakis V1 survey record · secondary · accessed 2026-08-15
  Supports: current TVL, Ethereum, Optimism, Polygon, Liquidity Manager category

Inherited controls

The research above describes the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The layer with the most administrative power sets the position’s effective control; that describes control, not quality or suitability.