SAND Integration with Arrakis Pro: Analysis of Base Liquidity Structure Changes

TL;DR

SAND officially launched on the Base network on December 3, 2025, and announced the integration of Arrakis Pro for algorithmic liquidity management on December 4. Base's liquidity structure is highly centralized (the top two addresses hold 98.61%), with a main pool TVL of only $4,061 and extremely low trading activity (only 12 transactions in 48 hours), a stark contrast to the Ethereum mainnet. (arrakis sandbox )

Integration Overview

Arrakis Pro Protocol Features

Core Functionality : Arrakis Pro (formerly PALM) is a non-custodial on-chain liquidity management protocol designed for token issuers and DAOs, supporting automated liquidity provisioning for DEXs such as Uniswap V3/V4, Aerodrome, and PancakeSwap .

Key advantages :

• MEV Perception Strategy : Providing TGE guidance, inventory rebalancing, and capital efficiency optimization.
• Modular architecture : supports multi-chain and multi-AMM deployment
• Automated management : Solves the "inventory problem" and guides the liquidity of quoted assets without external capital.

SAND Deployment Details

Base liquidity structure analysis

Initial liquidity deployment (December 3-4, 2025)

Key fund pool indicators :

Liquidity concentration :

• Extremely centralized : The first two addresses control 4,999,900 and 2,297,665 SAND (totaling 98.61%).
• Number of holders : Only 114 addresses, indicating an initial adoption phase.
• LP activity : Only 2 liquidity adjustment events in 48 hours (net increase of 0.1116 WETH and -2,259 SAND)

Liquidity efficiency assessment

Volume/TVL ratio : ~7.5% (24-hour $304/$4,061), significantly lower than mature markets.

Advantages :

• Cost savings : Base L2 transaction fees are approximately 90% lower than Ethereum's.
• Faster settlement : Faster block confirmation time

Disadvantages :

• Insufficient depth : A TVL of only $4k leads to a high risk of slippage.
• Low activity : Only 12 transactions in 48 hours, extremely low market participation.

Comparison with Ethereum mainnet liquidity

Cross-chain structural differences

Liquidity distribution pattern

Ethereum mainnet :

• Exchange holdings (Bithumb 5.13%, Binance and others combined 8.23%)
• Polygon Bridge (10.1%)
• Widely distributed DeFi pools

Base network :

• Initially, whales dominated (98.61% of the two largest addresses).
• Single Uniswap V3 pool (0.23% circulating supply)
• No significant LP migration observed

Market Impact Assessment

Price performance

Trends before and after launch :

Price response characteristics :

• On the launch date (December 3), the recovery rate was 6.5%, but it did not surpass the level of December 1.
• Arrakis shares rose modestly by 3% after the announcement.
• Overall reaction was muted, with a market capitalization of $396 million and a weekly decline of -7.04%.

Distribution of transaction activities

Global trading volume : $27.6M (24 hours, as of December 4)

• CEX-led : Base contribution negligible
• Base volume : ~$304 (24 hours), representing <0.01%

Changes in CEX liquidity :

• Net inflow on December 3 : 5,330,218 SAND (inflow of 7,802,655, outflow of 2,472,437)
• Exchange reserves increased from 313,540,436 on December 2 to 318,870,654 on December 3 (+1.7%).
• Inflow pressure : Positive net inflow may indicate preparation for selling pressure.

Technology and Derivatives Market

Overview of the Futures Market

Position data (2025-12-04 17:30 UTC):

Market implications :

• The decrease in open interest coincided with net inflows into CEX, indicating a reduction in leveraged positions.
• Positive funding rates indicate that bulls are in control, but the magnitude is moderate.

Technical indicator analysis

Current price : $0.1513

Multi-period indicators (2025-12-04):

Support/Resistance Levels :

• Key support levels : $0.1386 (lower Bollinger Band on the daily chart), $0.1379 (lower Bollinger Band on the 4-hour chart)
• Key resistance levels : $0.1829 (daily Bollinger Band upper line), $0.1855 (50-day SMA)
• OBV (1 day) : 206,450,499 (positive value), indicating potential accumulation.

in conclusion

Assessment of Liquidity Structure Changes

Short-term characteristics (December 3-4, 2025):

1. Centralized Deployment : Base liquidity is highly concentrated in a single Uniswap V3 pool ($4k TVL) and two whale addresses (98.61%), a stark contrast to the decentralized structure of the Ethereum mainnet.
2. Early adoption phase : Only 12 transactions in 48 hours, 114 holders, and extremely low transaction volume ($1,500) indicate limited ecosystem participation.
3. Infrastructure advantages : 90% cost savings and Arrakis Pro algorithm management lay the foundation for future expansion, but liquidity depth is severely insufficient (only 0.23% of circulating supply).

Expected impact of Arrakis Pro :

• Automated management : MEV-aware strategies and protocol-owned liquidity will reduce reliance on employed LPs and improve capital efficiency.
• AERO Incentives : Aerodrome staking positions can accumulate AERO rewards, enhancing long-term liquidity incentives.
• Healthy pricing : Algorithmic rebalancing aims to reduce price volatility and slippage, but requires a higher TVL to be effective.

Medium- to long-term outlook :

• Liquidity growth path : Requires scaling from the current $4k TVL to hundreds of thousands of dollars to support meaningful trading activity.
• CEX Stress Monitoring : On December 3rd, a net inflow of 5.3M SAND and an increase in exchange reserves may create short-term selling pressure.
• Base ecosystem synergy : Relying on Coinbase user adoption and the maturity of the Base DeFi ecosystem, current liquidity fragmentation limits usability.

Risk warning : The current liquidity structure is extremely fragile (98.61% concentration, $4k depth). Large transactions will face significant slippage. It is recommended to monitor the progress of liquidity deployment and whale address behavior.