How Orca Facilitates Capital Efficient mSOL Liquidity


Ahoy Marinators, Orca here! :whale:

In light of Orca’s continued growth, the protocol is providing more detailed information to longstanding partners on mSOL pool performance across Orca and providing suggestions on how to increase liquidity and capital efficiency across the Solana ecosystem. :sunny:

Any feedback is welcome, as are requests for other data you’d like to see from Orca’s corner of the ocean! :ocean:

Orca & Marinade

Orca maintains seven active mSOL Whirlpools: mSOL/SOL, mSOL/USDC, mSOL/USDT, mSOL/BTC, mSOL/ETH, mSOL/MNDE, mSOL/USDH, and mSOL/MNDE.

Whirlpools are Orca’s concentrated liquidity AMM (Automated Market Maker), bringing greater capital efficiency to all on-chain liquidity on Solana.

1. What are the benefits of an AMM?
An AMM enables users to trade one token for another without the need for a traditional market maker to match buyers and sellers. A traditional market maker would earn a fee (or another agreement to decrease risk) in order to maintain liquidity for a given pair. This drives “expenses” (rewards) to a single entity rather than the community, creating a restricted market for liquidity provision.

2. What are the benefits of a CLAMM (concentrated liquidity AMM)?
While traditional AMMs require LPs to provide liquidity across the entire infinite range of possible prices, Orca’s Whirlpools allow LPs to select the specific range of prices for which they would like to provide liquidity.

Even when LPs select very broad liquidity ranges, Whirlpools’ capital efficiency can deliver substantial benefits. And for stable or highly correlated pairs that are suited to tight ranges, capital can be used hundreds of times more efficiently. For rewards campaigns, significantly lower rewards can drive the same liquidity depth versus a traditional AMM.

This is an example of the dramatic increase in capital efficiency possible using Whirlpools:

  • +/- 88% from market price | >2x capital efficiency
  • +/- 50% from market price | >4x capital efficiency
  • +/- 20% from market price | >10x capital efficiency
  • +/- 10% from market price | >20x capital efficiency
  • +/- 5% from market price | >40x capital efficiency
  • +/- 1% from market price | >200x capital efficiency

So, we have the basics of on-chain liquidity down. But why should the Marinade community care?

There are base layer benefits to building sustainable mSOL and MNDE liquidity on Orca:

1. A nascent, growing ecosystem of builders choosing to create their products on top of Orca.
The benefits of concentrated liquidity are clear, but there are challenges with this more advanced method of liquidity provision (namely LP management!). To help remedy this, Orca has provided grants to 11+ teams to close this gap. The first of which is Kamino, and soon to be added are Nazare and Tulip. For the rogue LP, Orca has also recently rolled out Notifi notifications to aid LPs with keeping track of their positions.

2. Full programmatic access through Orca’s unified Whirlpools SDK and developer advocates to help guide others in integrating Orca pools.
This increases the availability of mSOL across the ecosystem! In the coming months, Orca’s dev advocates will be assisting with integrations across the ecosystem (from price feeds and swaps to active LP management).

3. The ability to emit up to three different reward tokens to LPs on a single Whirlpool:
Triple reward pools are unique to Orca’s Whirlpools and enable new collaboration opportunities with other protocols (e.g, mSOL/USDH which rewards LPs with MNDE, HBB, and ORCA).

4. Widespread integrations:
The Solana ecosystem is broad and forever expanding! A notable Orca integration from the past month is with Jet, which has chosen to build on Orca and in doing so improve the ability to borrow, lend, and leverage mSOL within their ecosystem. The Marinade community has also expressed that Pyth is an important integration, which Orca is working on rolling out shortly.

Orca is committed to building on Solana, and will not be “scaling horizontally” across other chains. Orca has also supported mSOL adoption since launch, and has been a steward for increasing mSOL adoption in general! :whale2:

Improving on-chain liquidity for mSOL:

Across Orca’s seven mSOL Whirlpools, Orca receives roughly 20% of MNDE rewards, with approximately 50% of mSOL volume across the Solana ecosystem.

When voting on how to allocate rewards, it is important to consider which gauges will most efficiently incentivize additional liquidity. The higher the capital efficiency of any given pool, the more liquidity (and therefore capacity for volume) will be incentivized by each additional marginal MNDE. When gauges offer similar capital efficiency, it is also worth considering how diversification across gauges might impact the decentralization of MNDE ownership to build a strong community.


  1. Open gauges and pools for additional vaults (e.g., for Kamino, and soon to be Nazare and Tulip) to support deeper mSOL liquidity on strategic pairs like SOL/mSOL and mSOL/USDC
  2. Monitor volumes for mSOL across pools, such as these Dune Dashboards to increase transparency and the availability of data. Orca would be happy to assist in supporting a grant to develop an on-chain volume and liquidity dashboard for mSOL pools.
  3. Consider driving deeper liquidity for mSOL-SOL through Whirlpools, as currently a traditional AMM pool (mSOL/SOL on Marinade) drives relatively low volume with 40% of MNDE rewards.

Lastly, a brief overview of what’s coming up on the Orca roadmap: :world_map:

1. Community Listings: The Marinade community will soon be able to add new token pairs for mSOL at will. These can then be used in borrow/lend platforms and vault platforms.

2. Fee Tiers: Support for multiple fee tiers (including 1 bps, 5 bps, 30 bps, and 100 bps).

3. Smart Order Routing: Orca strategically supports mSOL liquidity, such as building liquidity in mSOL/SOL in preparation for significant improvements to order routing. The benefit of Orca is that programs can efficiently integrate Whirlpools on-chain and reliably access any pair supported across Orca.

4. Open-source Analytics: Powered by Dune, any community member can fork a dashboard and see the on-chain workings of any mSOL pair on Orca.

5. ORCA Rewards: Orca has been providing rewards and will continue to allocate ORCA incentives to improve mSOL liquidity where needed (e.g., currently on mSOL-SOL as the primary pool to improve common trade routes across all pairs).

6. The ability to earn additional revenue for the Marinade Community: With every trade users make, external UIs can charge a sourcing fee through the Orca SDK that is returned to the protocol.

7. Decentralization: Orca will soon enter the phase the Marinade community has just completed - a transition to decentralization! As this occurs, the Orca community will become gradually more involved and tap into other ways to participate across other protocols’ governance.

As always, if the Marinade community has suggestions on how Orca can help better steward mSOL across the ecosystem, start a discussion below or hop into Orca’s Discord!