# Welcome to LiquidOps
An overcollateralized lending and borrowing protocol built on [Arweave](https://arweave.org/) and [AO](https://ao.arweave.dev/).
LiquidOps is a lending and borrowing protocol that providers users the ability to earn interest on their Arweave and AO assets. As well as borrowers the ability to use that lent liquidity in various decentralised applications.
It has been modeled after the successful Ethereum native money market [Compound V2](https://docs.compound.finance/v2/).
### Jump right in
# Oracle
LiquidOps uses a instance of the [Redstone](https://www.redstone.finance/) pull oracle on AO.
Oracle process ID: R5rRjBFS90qIGaohtzd1IoyPwZD0qJZ25QXkP7\_p5a0
You can via Oracle messages via ao.link [here](https://www.ao.link/#/entity/R5rRjBFS90qIGaohtzd1IoyPwZD0qJZ25QXkP7_p5a0?tab=incoming)
```json
// Example oracle message to the controller
{
"AR": {
"verifiedPackage": {
"v": 5.10010259,
"t": 1744749890000
}
},
"qAR": {
"verifiedPackage": {
"v": 5.10010259,
"t": 1744749890000
}
},
"USDC": {
"verifiedPackage": {
"v": 1.00000612,
"t": 1744749890000
}
},
"wUSDC": {
"verifiedPackage": {
"v": 1.00000612,
"t": 1744749890000
}
}
}
```
# Audits
**V1 audits**
{% file src="/files/iQNOB1ZnFHtyTpEjY5NT" %}
# LiquidOps JS
LiquidOps JS provides a seamless way to interact with the LiquidOps protocol in TypeScript and JavaScript projects.
This SDK simplifies the process of interacting on ao/arweave with LiquidOps.
# Installation & quickstart
You can install the LiquidOps JS using npm:
```
npm i liquidops
```
Or using yarn:
```
yarn add liquidops
```
Or using bun:
```
bun i liquidops
```
{% hint style="warning" %}
```
@permaweb/aoconnect >= 0.0.77
ao-tokens >= 0.0.6
warp-arbundles >= 1.0.4
```
Required peer dependencies for LiquidOps JS
{% endhint %}
Declare LiquidOps class in node environments:
```typescript
import { createDataItemSigner } from "@permaweb/aoconnect/dist/client/node/wallet";
import LiquidOps from "liquidops";
const JWK = `{
"kty": "RSA",
"e": "AQAB",
"n": "...",
"d": "...",
"p": "...",
"q": "...",
"dp": "...",
"dq": "...",
"qi": "..."
}`;
const signer = createDataItemSigner(JWK);
const client = new LiquidOps(signer);
```
You can also add optional custom configurations to the SDK:
```typescript
const client = new LiquidOps(signer, {
GATEWAY_URL: "",
GRAPHQL_URL: "",
GRAPHQL_MAX_RETRIES: "",
GRAPHQL_RETRY_BACKOFF: "",
MU_URL: "",
CU_URL: ""
});
```
Declare LiquidOps class in web environments:
```typescript
import { createDataItemSigner } from "@permaweb/aoconnect/dist/client/node/wallet";
import LiquidOps from "liquidops";
const signer = createDataItemSigner(window.arweaveWallet);
const client = new LiquidOps(signer);
```
Here's a simple lending example to get you started:
```typescript
import { createDataItemSigner } from "@permaweb/aoconnect/dist/client/node/wallet";
import LiquidOps from "liquidops";
const signer = createDataItemSigner(window.arweaveWallet);
const client = new LiquidOps(signer);
const lend = await client.lend({
token: "QAR",
quantity: 1n,
});
console.log(lend)
```
# Token data
Access supported token data
```typescript
import { tokenData, tokens, oTokens, controllers } from "liquidops";
```
Get token details
```typescript
const qarData = tokenData.QAR;
/* {
name: "Quantum Arweave",
ticker: "QAR",
address: "XJYGT9...",
oTicker: "oQAR",
oAddress: "CbT2b...",
controllerAddress: "vYlv6...",
// ...other metadata
} */
```
Get base token addresses
```typescript
const tokenAddress = tokens.QAR; // "XJYGT9..."
```
Get oToken addresses
```typescript
const oTokenAddress = oTokens.oQAR; // "CbT2b..."
```
Get controller addresses
```typescript
const controllerAddress = controllers.QAR; // "vYlv6..."
```
Helper function to resolve token addresses and related data
```typescript
import { tokenInput, type TokenInput } from "liquidops";
```
Can use either ticker or address
```typescript
const resolved = tokenInput("QAR");
```
Or
```typescript
const resolved = tokenInput("XJYGT9ZrVdzQ5d7FzptIsKrJtEF4jWPbgC91bXuBAwU");
/* Returns:
{
tokenAddress: "XJYGT9...", // Base token address
oTokenAddress: "CbT2b...", // oToken address
controllerAddress: "vYlv6..." // Controller process address
}
*/
```
Currently supported tokens: QAR (Test Quantum Arweave) and USDC (Test USD Circle)
# Utility functions
Get balance
```typescript
const getBalance = await client.getBalance({
tokenAddress: "XJYGT9ZrVdzQ5d7FzptIsKrJtEF4jWPbgC91bXuBAwU",
walletAddress: "psh5nUh3VF22Pr8LeoV1K2blRNOOnoVH0BbZ85yRick",
});
```
Get price
```typescript
const getPrice = await client.getPrice({
token: "WAR",
});
```
Get result
```typescript
const getResult = await client.getResult({
transferID: "0RY-eSVV156qxyuHBs3GPO2pwsIvmA-yI1oKS1ABSyI",
tokenAddress: "XJYGT9ZrVdzQ5d7FzptIsKrJtEF4jWPbgC91bXuBAwU",
action: "lend", // "lend" | "unLend" | "borrow" | "repay";
});
```
Transfer tokens
```typescript
const transfer = await client.transfer({
token: "QAR",
recipient: "psh5nUh3VF22Pr8LeoV1K2blRNOOnoVH0BbZ85yRick",
quantity: 1n,
});
```
# oToken data functions
Get APR for a token
```typescript
const getAPR = await client.getAPR({
token: "QAR",
});
```
Get balances
```typescript
const getBalances = await client.getBalances({
token: "QAR",
});
```
Get exchange rate
```typescript
const getExchangeRate = await client.getExchangeRate({
token: "QAR",
});
```
Get global position
```typescript
const getGlobalPosition = await client.getGlobalPosition({
walletAddress: "psh5nUh3VF22Pr8LeoV1K2blRNOOnoVH0BbZ85yRick"
});
```
Get token info
```typescript
const getInfo = await client.getInfo({
token: "QAR",
});
```
Get position for a address
```typescript
const getPosition = await client.getPosition({
token: "QAR",
recipient: "psh5nUh3VF22Pr8LeoV1K2blRNOOnoVH0BbZ85yRick",
});
```
# Protocol data functions
Get all positions
```typescript
const getAllPositions = await client.getAllPositions({
token: "QAR",
});
```
Get historical APR
```typescript
const getHistoricalAPR = await client.getHistoricalAPR({
token: "QAR",
});
```
# Lending
Lend tokens
```typescript
const lend = await client.lend({
token: "QAR",
quantity: 1n,
});
```
Un lend tokens
```typescript
const unLend = await client.unLend({
token: "QAR",
quantity: 1n,
});
```
# Borrowing
Borrow tokens
```typescript
const borrow = await client.borrow({
token: "QAR",
quantity: 1n,
});
```
Repay borrowed tokens
```typescript
const repay = await client.repay({
token: "QAR",
quantity: 1n,
});
```
# Liquidations
Liquidate a position
```typescript
const liquidate = client.liquidate({
token: "QAR",
rewardToken: "USDC",
targetUserAddress: "psh5nUh3VF22Pr8LeoV1K2blRNOOnoVH0BbZ85yRick",
quantity: 1n,
});
```
Get available liquidations
const liquidate = client.getLiquidations();
Get discounted quantity
```typescript
const getDiscountedQuantity = client.getDiscountedQuantity({
liquidated,
rewardToken,
qualifyingPosition,
priceData,
validateMax: false // Optionally validate the liqidated token quantity and the discounted quantity. This will throw an error if any of these quantities are more than what the user holds.
});
```
# Retrieving transactions
Get transactions for a specific token and action
```typescript
const getTransactions = await client.getTransactions({
token: "QAR",
action: "lend", // "lend" | "unLend" | "borrow" | "repay";
walletAddress: "psh5nUh3VF22Pr8LeoV1K2blRNOOnoVH0BbZ85yRick",
});
```
Get a transactions result after it has been submitted
```typescript
const getResult = await LiquidOpsClient.getResult({
transferID "", // the id returned from lend/borrow/unLend/repay
tokenAddress: '', // address of the token
action: "", // "lend" | "unLend" | "borrow" | "repay";
});
```
# How do Liquidations Work in Overcollateralized Lending Protocols?
### **Traditional Loans**
If you take out a loan for a house, the house itself will act as its own collateral. Now if you get into debt, the house itself can be seized to recover said debt.
### **Loans in the World of Crypto**
In crypto there are overcollateralized loans. Since you can’t put up your house, you have to give something up in case you get into debt.
This can’t be something that holds the same value as your loan because of the rapid change of price differences between tokens, and also to safeguard the protocol.
### **Overcollateralized Loans**
This means that you pledge more collateral than the amount borrowed. For example, if it has a 200% collateralisation rate, then two times the value of the loan must be pledged as collateral.
This rate is determined by a risk analysis, in LiquidOps case this is to be made on a case-by-case basis by a protocol governance vote. Collateral supplied to LiquidOps is locked, unless either you pay back your loan or the position is liquidated due to bad debt.
### **Liquidation in the Context of Overcollateralized Lending Protocols**
When you take out a loan, the protocol will maintain the collateralisation ratio. If the value of the collateral falls significantly, the loan-to-collateral ratio increases.
To safeguard the protocol, a liquidation ratio is set, typically below the initial collateralization ratio, but above 100%. If the collateral value falls below this ratio, liquidation is triggered.
In the liquidation process, the protocol automatically sells a portion (or all) of your collateral to repay the loan. This often involves offering the collateral at a discount to buyers to acquire it.
Liquidations are essential not only to protect the protocol, but to maintain the ecosystem's DeFi stability.
# How does LiquidOps Enable Decentralized Leverage in the Arweave and AO Ecosystem?
## **Decentralized Leverage**
Decentralized leverage in the context of lending protocols refers to the process of using DeFi lending platforms to borrow and increase exposure to an asset without needing a middleman, like a bank or an exchange.
## **How does it Work?**
First, you deposit a collateral into a lending protocol, in exchange for collateral tokens (like oTokens), which represent your position.
Next, you borrow another asset (usually a stablecoin) using your deposit as collateral. The protocol keeps your loan protected by maintaining a collateralization ratio, making sure the loan stays protected with price drops and market changes.
You then use the borrowed asset to buy more of the original asset, and deposit that again as collateral. This cycle can be repeated several times, increasing your exposure to the original asset, creating decentralized leverage.
This strategy is often utilized by experienced traders and borrowers on lending protocols such as Compound or Aave, but can also be applied with LiquidOps.
## **How does LiquidOps Enable Decentralised Leverage in the Arweave and AO Ecosystem?**
One of the most widely used use cases of lending and borrowing protocols is decentralized leverage. Experienced DeFi traders frequently use this process; let’s break down how it works.
For example, enabling leverage of the Arweave token with LiquidOps lending and borrowing:
First, a user would pledge collateral for a loan in Arweave, and then they would borrow a stablecoin, like USDA.
From the USDA loan, they would buy more Arweave tokens on a decentralised exchange like Botega, gaining more exposure to the Arweave token.
They would then sell the Arweave from the USDA swap once the price increases/decreases to their desired target.
Once sold they would then pay back the initial USDA loan and profit from the difference between the extra exposure in the USDA/Arweave swap from the original loan enabling a greater exposure to the Arweave example due to LiquidOps!
# How to Use LiquidOps: A Step-By-Step Guide
### **Step 1: Access LiquidOps**
Visit [liquidops.io](http://liquidops.io/) and connect with your wallet.
### **Step 2: Get wUSDC and wAR**
To supply assets, you need wUSDC and wAR in your wallet:
* wUSDC: Wrap USDC using [https://aox.arweave.net](https://aox.arweave.net/). Just connect your Ethereum wallet, find wUSDC in the assets list and click on bridge. Enter the amount of USDC you want to wrap and confirm it!
* wAR: You can use the same process for getting wAR as with wUSDC.
You can also swap for both tokens directly on Botega.
### **Step 3: Supply Assets on LiquidOps**
Back on the LiquidOps homepage, click “Supply Assets”.\
Select wUSDC or wAR, enter the amount you want to supply, then click “Deposit.”\
Confirm the transaction in your wallet.
After supplying, your tokens will appear under “Position Summary” on the home page. To check interest rates and earnings, use the “Lent Assets” section on the homepage.
### **Step 4: Borrow Assets**
Next, click on the Borrow Assets button. Select the type and amount of tokens you want to borrow. The Position Summary will display how this borrowing will affect your current position, including:
* Your current collateral
* Your current borrowing capacity
* Your borrowing limit after the transaction
Click on the Submit button to confirm your borrowing request.
### **Step 5: Track Your Position**
Return to the home page to view your borrowed tokens and the associated interest rate under the Borrowed Assets section. All of your collateral will be listed under the Yielding Assets section.
### **Other Features/Sections**
**Markets Section**: View lending and borrowing pools with each token’s TVL, available liquidity, borrowed amount, interest rates, and utilization.
**Strategies Section**: Strategies for shorting and longing tokens using LiquidOps.
# The Jump Rate Interest Model
### **The Jump Rate Interest Model**
In Defi lending and borrowing platforms interest rates change based on supply and demand. The Jump Rate Interest Model is designed to keep lending pools liquid by adjusting rates dynamically.
In contrast to traditional models that predict gradual interest rate changes, this model helps maintain liquidity by keeping rates stable under normal conditions and allowing sudden rises when borrowing demand is too high.
### How it works
When utilization is low to moderate, interest rates rise gradually, ensuring predictable costs for borrowers and stable returns for lenders.
However, when utilization reaches a critical level (meaning most available funds are borrowed) the model triggers a sudden spike in interest rates. This jump discourages further borrowing, encourages repayments, and attracts more deposits.
### Why is it useful?
* **Prevents liquidity crises**: high rates discourage excessive borrowing.
* **Adapts to crypto volatility**: quickly responds to market demand shifts.
* **Optimizes capital efficiency**: keeps lending protocols balanced.
By adapting quickly to market shifts, the Jump Rate Interest Model ensures DeFi lending remains efficient, liquid, and sustainable, even in unpredictable conditions.
# The LiquidOps Auction Model
### LiquidOps Auction Model
Liquidations possess a key role in DeFi protocols. They are fundamental elements of the protocol’s operation, because they ensure that loans without enough collateral are repaid as quickly as possible.
Successful liquidations require competition between liquidators so debts can be settled quickly and efficiently.
Let’s see how this process works for LiquidOps!
### Discounted Auction for Liquidations
To make liquidators act fast and handle numerous liquidations, we use an auction model for liquidatable positions.
This model works by offering a predetermined percentage discount compared to the market price – in our case, 5% – at the moment the liquidation is detected. This way, liquidators can acquire tokens at a lower price.
### Time-Based Dutch Auction Mechanism
To encourage fast liquidation, the auction model decreases the discount percentage linearly over a set period, until the discount reaches 0%. This ensures that liquidators compete to settle the debt as quickly as possible.
It is worth noting that larger protocols typically use a "Dutch auction" model, which starts with a high liquidation bonus that gradually decreases over time until a buyer steps in.
# The LiquidOps Fair Launch
### What is an AO fair launch?
Via the decentralized funding network, The Permaweb Index, users in the AO/Arweave ecosystem can delegate AO yield that is currently being earned on AR tokens towards ecosystem fair launches.
In exchange they get back the project's token, without transferring their underlying AR tokens and the project receives AO/PI through the Permaweb Index.
In short, the AO/Arweave communities receive LQD and LiquidOps receives decentralised funding.
### LQD Tokenomics
[LQD](/protocol-mechanics/the-lqd-token), the native token of LiquidOps has a maximum supply of 50,000,000 tokens, distributed as follows:
**28% DAO**
* 23% allocated to the protocol treasury.
* 5% allocated to oToken reserves.
* Both governed by token holder-led governance, ensuring community control.
**25% Liquidity Mining**
* Used to incentivise protocol usage and distribute tokens to active users.
* Helps bootstrap liquidity and network activity.
**15% AO Fair Launch 1**
* Portion of token supply allocated to our first AO fair launch.
**15% Founders & Future Contributors**
* 8% set aside for current founders and team members.
* 7% reserved for future contributors to the protocol.
**10% Foundation**
* Portion of tokens allocated to the foundation, to be used for ecosystem grants, audits, developer tooling and protocol infrastructure.
**7% Private Token Sales**
* Allocated in prior rounds: 2 private sales, 1 incubator round, and 1 pre-seed round.
* Supported by 8 angels and 0 VC’s.
### How to delegate AO to the LQD fair launch
1. Head to[ https://ao.arweave.net/#/delegate/](https://t.co/FrDrVdD5gR)
2. Connect your Arweave/AO wallet
3. Delegate your AO yield to LiquidOps (LQD)
4. Confirm your delegation preferences
5. Start earning LQD!
LQD tokens will remain locked until Mainnet Beta is over and LiquidOps enters Mainnet.
*Token address:* [n2MhPK0O3yEvY2zW73sqcmWqDktJxAifJDrri4qireI](https://aoscan.arweave.dev/#/process/n2MhPK0O3yEvY2zW73sqcmWqDktJxAifJDrri4qireI)
*Fair launch address:* [N0L1lUC-35wgyXK31psEHRjySjQMWPs\_vHtTas5BJa8](https://aoscan.arweave.dev/#/process/N0L1lUC-35wgyXK31psEHRjySjQMWPs_vHtTas5BJa8)
# The LQD Token
### The protocol
LiquidOps is an over-collateralized lending and borrowing protocol built on Arweave and AO, which via AO processes that automatically facilitate lending and borrowing transactions.
Users can deposit various tokens into the protocol like AR, USDC, USDT and ETH. In return, they receive tokens representing their stake in the liquidity pool.
The value of these tokens increases over time as interest accrues, enabling users to earn passive income on their deposits.
### The purpose and function of LQD token
LQD represents a huge transformation in LiquidOps history, turning it from a developer led platform into a community governed protocol.
It serves several critical functions within the LiquidOps ecosystem:
#### 1. Governance token
The primary purpose of the LQD token is to enable governance over the LiquidOps protocol.
LQD enables users to participate in the decision-making process of the platform. Holders of LQD can propose changes to the protocol, such as adding new assets, adjusting interest rates, or modifying collateral factors.
#### 2. Proposal creation and voting
Anybody with LQD can propose a governance action, these are simple or complex sets of actions, such as:
* Adding support for a new asset
* Changing an asset's collateral factor,
* Changing a market's interest rate model
* Changing any other parameter or variable of the protocol.
The governance process follows a structured approach:
* All proposals are subject to a voting period.
* Any address with voting power can cast votes for or against the proposal.
* If a majority of votes support the proposal, it is queued for implementation.
#### 3. Vote delegation
One unique capability is that users who hold LQD have the ability to delegate their votes to someone of their choosing.
This could come in handy if LQD holders want to solicit expertise from their network. This feature ensures that even passive holders can participate in governance through trusted delegates.
#### 4. User incentivization
LQD tokens are distributed among the various LiquidOps money markets based on the dollar value of assets lent/borrowed.
The LiquidOps token LQD, serves as both a governance mechanism and an incentive system that aligns user interests with protocol development.
By distributing decision making power to token holders, LQD ensures that LiquidOps can evolve and adapt based on community needs rather than centralised authority.
The token's dual function as both a governance tool and a reward mechanism creates a sustainable ecosystem where active participation is incentivised and protocol improvements benefit all stakeholders.
\
# Cross-Collateral Lending Protocols
### Cross Collateral Lending
In decentralized finance, borrowing usually means using a single type of token as collateral. In cross-collateral lending protocols on the other hand, let users use multiple assets at the same time to secure a single loan.
This makes it possible to combine different types of tokens, making borrowing more easy, efficient and flexible.
Let’s look into it!
### What Are Cross-Collateral Lending Protocols?
Cross-collateral lending protocols are platforms that allow users to use a mix of different tokens as collateral for a single loan. Instead of locking only one asset, users can deposit a bundle of tokens for increased borrowing power and reduced risk of liquidation.
### How Do They Work?
1. First, users deposit multiple assets into the protocol.
2. After this, the protocol will add up the value and risk of all tokens deposited.
3. Based on these, it sets a borrowing limit based on a blended loan-to-value (LTV) ratio.
4. If a loan is issued, it will be backed by all the tokens deposited as collateral.
5. If the total collateral value drops too low, the protocol can sell off just enough assets to cover the risk.
### Benefits this Kind of Lending Protocol Offers!
* **Better Capital Efficiency**: You can borrow more with the same assets by pooling them together.
* **Reduced Liquidation Risk**: One asset dropping in value is less risky when others are still strong.
* **Flexible Collateral Choices**: You can use different types of tokens – volatile coins, stablecoins, even yield-earning assets.
* **Easier To Manage**: You can handle one loan backed by multiple assets instead of managing several separate ones.
# How are Lending Protocol Interest Rates Determined?
### How are Lending Protocol Interest Rates Determined?
Interest rates on DeFi platforms like AAVE and Compound often fluctuate. Ever wondered why?
The answer can be found by looking at supply and demand. Let’s take a closer look at how it works!
When many people deposit an asset, the supply is high so interest rates are low to incentive borrowing. Lenders will also earn less since the protocol doesn’t need more deposits.In simpler terms, when the token supply is high, the interest rate will decrease.
### What Causes the Interest Rates to Increase?
When everyone wants to borrow an asset, it becomes scarce (the supply becomes limited). To make borrowing more expensive, the protocol raises the interest rate. This encourages more people to lend, increasing supply.
### The Key Factor: Utilization Rate
When the majority of the deposited funds are borrowed, the interest rate increases. When there are only a few borrowers, the interest rate decreases. This ensures liquidity for both the borrowers and the lenders.
### But wouldn’t it be hard to keep up with these rapid changes?
That is why lending protocols use intelligent algorithms to adjust interest rates in real-time based on what’s being borrowed and deposited.
### So next time rates change, you’ll know:
Increased Lending Supply = Low Interest Rates
Increased Borrowing Demand = High Interest Rates
# Lending Pools vs. Peer-to-Peer Lending
### P2P vs Lending Pools
Lending pools and P2P (peer-to-peer) lending are both forms of decentralized lending and borrowing. Although they serve the same purpose, they are different in many ways.
Let's compare them based on a few aspects!
### Mechanism
P2P lending allows one-on-one interactions directly between lenders and borrowers, usually through a platform that matches them with each other.
Lending pools, on the other hand, collect funds from multiple lenders into a shared pool, allowing borrowers to draw from it. This method is more commonly used in DeFi.
### Parties Involved
In P2P lending, both parties are actively involved in negotiating terms such as interest rates and repayment schedules.
Lending pools simplify this process – lenders contribute to the pool, and borrowers interact with the pool directly.
### Liquidity
P2P lending typically locks funds for the duration of the loan, making it less flexible.
Lending pools often provide greater liquidity, allowing lenders to withdraw or trade their positions, depending on the platform's design.
### Fees
P2P platforms may charge fees for connecting borrowers with lenders and for managing loans.
Lending pools typically use automation to simplify operations, which can help reduce costs (platform fees might still apply).
### Use cases
P2P lending is ideal for customized loans where borrowers and lenders have specific preferences
Lending pools, with their automated and scalable structure, are ideal for DeFi applications, such as trading, staking, and quick access to funds.
LiquidOps utilizes the lending pool approach, ensuring flexibility and maximizing your earning potential. The protocol also aims to bring in as many advantages of lending as possible.
# Places to Earn Yield in the Arweave and AO Ecosystem
### Earning Yield
Earning yield is a great way to grow your assets passively while also contributing to the growth and stability of the Arweave and AO ecosystem.
Let’s break down how it works and all the ways to do it right now in the ecosystem!
### What does it Mean to Earn Yield?
Think of it as earning interest for your money, but instead of a bank, you do it on crypto platforms.
In the context of decentralized finance (DeFi), yield is usually earned by contributing assets to protocols/platforms that put them to use in many ways, like lending, staking or providing liquidity.
### All the Ways to Earn Yield in the Arweave and AO Ecosystem
#### Botega
Botega is a DEX within the Arweave ecosystem that offers decentralized finance (DeFi) tools.
You can earn rewards through Botega, by providing liquidity, which means making your tokens available for others in the ecosystem to swap with.
It’s an easy way to earn passive income by putting your tokens to work.
#### Permaswap
Permaswap is a decentralized exchange (DEX) for trading tokens. By providing tokens, you contribute to the exchange function by providing others the liquidity they need to trade.
As a reward, you earn a share of the fees generated by these trades.
As there is no need to manage your tokens after they’ve been added, it is an easy way to earn passive income.
#### The AO stETH Bridge
The AO stETH Bridge is designed for people who hold stETH, a type of Ethereum token representing staked ETH.
By depositing stETH into the AO bridge, it gets stored safely on Ethereum, while you earn daily rewards in AO tokens. The rewards grow based on the amount of stETH you stake.
These AO tokens have been tradable since February 2025, making this an excellent long-term earning option.
#### Holding AR to earn AO
Another way to earn AO is simply holding AR tokens in your wallet. Doing this allows you to earn AO tokens automatically, like earning interest in a savings account.
You earn based on the number of AR tokens you hold. (Currently, for every AR you hold, you earn about 0.016 AO per year.)
All of these options – Whether you’re holding AR, staking stETH, or using platforms like Botega and Permaswap – provide an easy way to grow your assets passively in the Arweave & AO ecosystems!
# Project Highlight: Arweave
### What is Arweave?
[Arweave](https://arweave.org/) is a decentralized data storage network designed to provide permanent, tamper-proof storage solutions. Unlike traditional storage networks that rely on recurring payments and centralized control, Arweave offers a "pay once, store forever" model, ensuring that data remains accessible and unaltered indefinitely.
### How does Arweave work?
The foundation of Arweave's technology is a unique "blockweave" structure, an evolution of blockchain that connects each new block to both the previous block and a randomly selected earlier block. This design improves data integrity and makes retrieving information more efficient. Arweave promotes long-term storage by using a Proof of Access (PoA) system. In 2022, this was upgraded to Succinct Proof of Random Access (SPoRA), which made the network more secure and improved data retrieval speed.
Its key features include:
* Permanent Storage: \
Users pay a one-time fee to store data indefinitely, supported by a funding system that ensures miner incentives for the long term.
* AR Token: \
The native token of the network, used to pay for storage and reward miners for maintaining data integrity.
* Decentralized Infrastructure: \
Arweave distributes storage responsibilities across a global network, ensuring data integrity, availability, and resilience against censorship.
### The Permaweb
Arweave's decentralized layer, known as the Permaweb, allows developers to build decentralized applications (dApps) on top of the network. This layer enables applications like permanent email, website hosting, and file storage. For example, Weavemail offers decentralized email, and ArDrive provides file storage. Unlike traditional cloud-based services, Permaweb offers immutability and resistance to censorship, making it a great option for developers wanting to keep important NFT data and DeFi front ends stored forever.
### Why is it important?
Arweave solves issues like losing data, censorship, and tampering that happen with central storage. The protocol’s adaptability, established content policies, and compatibility with existing web standards make it useful for a wide range of use cases. Arweave enables large-scale, tamper-proof, verifiable storage, potentially changing long-term data management.
# Project Highlight: AO
### What is AO?
AO is a decentralized execution layer designed for enhancing the stability and performance of blockchain applications. Unlike traditional blockchains – where all smart contracts share the same memory – AO separates each process to its own isolated state, where they can still communicate through messages, but they don't interfere with each other's operations.
### What does AO do?
AO fixes one of the biggest problems with current blockchains: they can only do one thing at a time. AO lets unlimited processes run at the same time without slowing each other down.
Its main features include:
* **Parallel Processing**\
AO can run many processes at once instead of waiting in line. This makes apps much faster and lets developers build things that weren't possible before.
* **Multiple Virtual Machines**
Developers can choose different environments to run their apps in, and they all work together without competing for resources.
* **Flexible Design**
Everything in AO can be swapped out or upgraded. The messaging system, virtual machines, and other parts can all be changed.
* **Permanent Storage**
All computations and results are stored forever on Arweave, so everything is transparent and can be checked by anyone.
* **Cross-Chain Assets**
Assets can easily move between different blockchains, so tokens from one blockchain can be used on AO and vice versa.
### How Does It Work?
AO works through several key components, such as:
* **Message System:**\
Instead of sharing memory like traditional blockchains, processes in AO send messages to each other. This lets them work independently without conflicts.
* **Built on Arweave:**
All data is stored permanently on Arweave, so nothing gets lost and everything can be verified.
* **Separate Processes:**
Each app or function runs in its own space, so they can't slow each other down or interfere with each other.
* **Resource Sharing:**
The network can share computing power and storage across different nodes, making everything more efficient.
### Current Projects and Applications
The AO ecosystem has grown quickly with many projects already building on it. Key projects include [Perplex](/project-highlights/project-highlight-perplex) for perpetual contract trading, LiquidOps for lending and borrowing, and [Botega](/project-highlights/project-highlight-botega) and Permaswap for decentralized exchanges.
The ecosystem also features essential infrastructure like Protocol.Land for permanent code storage, Wander as a user-friendly wallet, and Bazar as a marketplace platform. [Astro USD](/project-highlights/project-highlight-astro) (USDA) provides a stable currency backed by AR tokens, while ArNS makes the platform more accessible with simple, readable names instead of complex addresses.
### Why is it important?
AO solves a major problem in blockchain technology: speed and scalability. AO's design lets it handle high-speed trading while still being completely decentralized and transparent. By combining permanent storage from Arweave with fast parallel processing, AO makes it possible to build complex apps that can compete with traditional centralized services. This opens the door for the next generation of Web3 applications, from advanced trading platforms to AI-powered tools that can run completely on-chain.
# Project Highlight: Astro
### About Astro
Astro USD (USDA) is an over-collateralized stablecoin designed to work within the AO and Arweave ecosystems. The platform offers multiple DeFi services like bridging, trading, and earning opportunities.
Let’s look into it!
### What does Astro USD do?
It's a decentralized finance (DeFi) platform, that allows users to securely transfer, trade, and earn digital assets across blockchain networks without relying on traditional financial institutions.
Its key features include:
* **Quantum Bridge**: A secure portal enabling users to bridge assets between Arweave and AO.
* **Defi, Prediction Markets & GameFi**: The platform enables participation in on-chain prediction markets, decentralized gaming economies (GameFi), and AI-driven financial applications (AgentFi).
### Security and Performance
Astro USD operates within a trustless environment, reducing reliance on intermediaries, and transactions are processed efficiently within the AO ecosystem.
Additionally, Arweave’s permanent storage preserves data integrity and transparency by ensuring records cannot be altered or deleted.
### Ecosystem Partnerships
Astro USD collaborates with partners like Community Labs, Protocol.Land, ArConnect, Perplex, Botega, FairAI, Autonomous Finance, Copper.co, BoomFi, CoinMaker, DEXI, and LiquidOps to enhance its infrastructure and user experience.
# Project Highlight: Botega
### What is Botega?
Botega is a decentralized exchange (DEX) developed by Autonomous Finance. It is built on AO and is designed to operate without intermediates, using autonomous agents to manage trading and liquidity. It operates in a fully permissionless way, providing a user-friendly trading environment.
Let’s look into its core features and how it works!
### Trading with Autonomous Agents
Botega’s system utilizes autonomous agents to handle trading tasks. These agents process transactions, manage liquidity, and execute trades based on preset rules, making trading more efficient.
### Order Types
Botega supports different types of trades, including:
* **Limit Orders**: Users can set a price at which they want to buy/sell an asset. The trade happens only when the market reaches that price.
* **Dollar-Cost Averaging (DCA)**: Users can set automated periodic purchases to reduce exposure to short-term price volatility.
* **Stop-Loss Orders**: If an asset’s price drops to/below a certain level it gets sold automatically.
### Decentralized and Permanent Platform
Botega’s user interface is hosted on Arweave, meaning it cannot be taken down or altered. Users can access the platform through different AR.IO gateways, like botega.g8way.io and botega.permagate.io.
# Project Highlight: Community Labs
### What is Community Labs?
Community Labs is a company that builds and supports software tools for Arweave and AO, two technologies that focus on permanent and secure data storage on the internet.
Let’s see what they do exactly!
### What is Arweave?
Arweave is a decentralized storage network designed for permanent, tamper-proof data storage.
Unlike traditional cloud solutions that rely on subscriptions and can remove or alter data over time, Arweave ensures that your data lives on.
### What is AO?
AO is a decentralized execution layer that enhances blockchain application performance by isolating processes instead of sharing memory.
This approach allows processes to communicate via messages. It also introduces autonomous organizations, enabling composable smart contracts for next-gen Web3 applications.
### What does Community Labs do?
Community Labs creates tools and services that make it easier for developers and businesses to use Arweave and AO:
* Develop Software Tools: They build applications that help people interact with Arweave. One of their major projects is Wander (formerly ArConnect), a digital wallet that allows users to store and manage their assets on the Arweave network.
* Support New Projects: They provide funding, mentorship, and business advice to startups that want to build on Arweave and AO.
* Offer Development and Marketing Services: Community Labs helps companies design, develop, and promote their decentralized applications (dApps).
### Why is it Important?
Community Labs is building the infrastructure, tools, and support needed to speed up decentralized innovation on Arweave and AO.
By funding and mentoring startups and developing user-friendly applications, they make decentralization practical, adaptable, and impactful.
# Project Highlight: Perplex
### What is Perplex?
[Perplex](https://perplex.finance/) is a fully on-chain decentralized perpetual trading platform built on AO and Arweave combining the speed of centralized exchanges (CEXs) with the transparency and flexibility of decentralized infrastructure.
By leveraging Arweave for permanent storage and AO for decentralized processing, Perplex creates a trustless trading environment where users remain in control of their assets
### What does Perplex do?
Perplex lets users trade perpetual contracts – a type of contract that doesn’t expire. Traders can use up to 20x leverage, which means they can open larger positions with less upfront capital.
Its main features include:
* Multi-Collateral Trading\
Instead of relying on just one asset, Perplex enables users to trade using different forms of collateral – such as ETH, USDC, DAI and more – giving traders more flexibility in how they manage funds.
* On-Chain Matching and Settlement\
Every trade is handled directly on the blockchain. This ensures full transparency, because all activity is permanently recorded on Arweave and can’t be altered.
* High Performance\
Most decentralized exchanges are slower than their centralized counterparts. With transaction speed as low as 100 milliseconds, Perplex is able to compete with traditional trading platforms.
* Wallet-Based Access\
There is no need for creating an account or custodial service, users simply connect their crypto wallet (like Wander) and can simply begin trading, keeping full ownership of their assets
How does it work?
Perplex is powered by the Permanent Stack, which includes:
* AO Execution Layer: \
AO powers the real-time processing of trades. Unlike blockchains that push every action into a single shared state, AO separates processes and lets them communicate through messages. This makes trading faster and more scalable without losing decentralization.
* Arweave Storage: \
All trade history and records are stored permanently on Arweave. With data that can’t be modified or removed, the blockchain guarantees a reliable reflection of all transactions
* [AR.IO](http://ar.io/) Gateway: \
To make sure users around the world can access Perplex reliably, the platform operates its own AR.IO gateway. This reduces delays, keeps the system online, and ensures no single party can block access.
* Arweave Name System (ArNS): \
Perplex integrates ArNS, replacing complex character strings with simple names and a decentralized interface. This makes the platform more user-friendly and resistant to shutdowns.
With all these layers working together, Perplex achieves true decentralization at every level: storage, execution, and access.
### What’s next for Perplex?
Perplex’s 2025 roadmap highlights its plans to expand beyond perpetuals into a fully integrated decentralized exchange ecosystem.
**Q2 2025**
* Launch of Perpetual Contracts
* Points Program for community rewards
* Swap feature rollout
**Q3 2025**
* Autonomous Vaults for automated strategies and liquidity management
* Developer SDKs in Python, Go, and TypeScript
* Multi-hop swaps for more advanced trading options
**Q4 2025**
* Multi-account support
* Isolated margin for risk management
* Launch of Spot Trading
* Permissionless pool listings, letting the community add liquidity markets directly
### Why is it important?
Perplex shows that decentralized finance can be practical, secure, and user-friendly. By combining permanent storage, fast execution, and fully decentralized infrastructure, it keeps users in control while providing a reliable trading experience.
# AO Fair Launch
With its fair launch model, AO takes a different approach to token distribution, overcoming common issues faced by traditional airdrops.
Let’s look into it!
### What are Airdrops?
Airdrops are a method of distributing tokens to users, often for free as part of a marketing or community-building strategy.
However, they can face criticism due to problems such as centralization, technical difficulties, unfair eligibility, etc.
### AO's Fair Launch
AO aims to address these problems with its fair launch model. AO distributes 100% of its 21M tokens to the community:
36% to Arweave (AR) holders, rewarding them for their role in the ecosystem.
64% to users bridging assets like staked ETH into AO, bringing liquidity and utility from other networks.
### AO’s Tokenomics
AO uses a bitcoin inspired halving cycle to promote long-term value and stability. Tokens are realised every five minutes, with the value decreasing gradually over time.
With this scarcity-driven approach participants are inspired to hold onto their tokens, minimizing speculative selling and preventing price crashes.
AO uses gradual distribution and long-term incentives to avoid the instability found in badly designed token systems.
### Why does it Matter?
AO’s fair launch flips the script on traditional airdrops. By giving 100% of tokens to the community, it avoids the common problems, like centralization and unfair distribution.
This model sets a new standard for fairness and transparency in the crypto space.
# Understanding AO: Key Projects and Pre-Bridged Assets Overview
### **Introduction to AO and Its Ecosystem**
With the development of new platforms blockchain technology continues to evolve, becoming more and more fast and efficient. AO is one of these platforms, created to improve blockchain performance.
Let’s look into what AO does, the assets in its system, and the key projects driving it forward!
### **What is AO?**
AO is a decentralized execution layer designed for enhancing the stability and performance of blockchain applications.
Unlike regular blockchains where memory is "shared" between Smart Contracts, AO avoids creating dependencies and uses a mechanism similar to the CPU of computers by isolating "processes". These processes can communicate with each other using messages.
### Pre-Bridged Assets
Bridging is the process of moving assets between blockchains, enabling them to work together.
Pre-bridged assets are tokens that are designed to easily move across blockchains, allowing them to be used within many different platforms within the AO ecosystem.
### Key Projects in the AO Ecosystem
#### LiquidOps
Our project, LiquidOps is a decentralized lending and borrowing platform built for Arweave and AO assets. It allows users to earn interest and/or access liquidity by using their digital assets as collateral.
#### Protocol.Land
Protocol Land is a decentralized platform for hosting open-source code. Built on Arweave’s blockweave, it stores code permanently and securely, allowing developers to collaborate in a censorship-free environment.
#### Botega
Botega is a decentralized exchange (DEX) for Arweave, where users can trade freely with no middlemen. It uses Arweave’s secure, permanent storage for transparent transactions and allows autonomous trading through agents.
#### Astro USD
USDA is a stablecoin in the AO ecosystem, backed by $AR. It’s designed to stay stable and provide liquidity, with the Quantum Bridge allowing easy transfer between Arweave and AO.
### Other Important Projects
Other important projects in the AO ecosystem include ArFleet, Bazar, Wander, Perplex, Permaswap and ArNS, which contribute to expanding the decentralized infrastructure.
These projects are helping grow the AO ecosystem, making blockchain faster, more decentralized, and transparent. As AO develops, it’s creating a better future for blockchain technology.