# Introduction

<figure><img src="https://1180540342-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Frl3dSIdUNdPAk43XA8d6%2Fuploads%2FOrNuR9QyE2ZyOkF9kBsk%2FX_2.png?alt=media&#x26;token=a7be2712-698c-493d-9a11-3a5a69bddfc6" alt=""><figcaption></figcaption></figure>

## Empowering Access to Automated Arbitrage Strategies

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**Simplified TLDR;**\
Private Pools Network extracts value from volatility (the ups and downs in market prices). We do so by a process known as Arbitrage. \
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What makes us special from your "run of the mill" [arbitrage](https://docs.privatepools.network/overview/broken-reference) bot is that we restrict interaction with our liquidity pools so only our trading engine can interact with them. This establishes a "[Private Order Flow](https://docs.privatepools.network/overview/broken-reference)" business model. \
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This results in yield extraction opportunities that are exclusive and unique to our ecosystem. \
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**In short we;**\
\- Optimize the arbitrage process by circumventing middle men (extracting up to 80% more value by avoiding[ PGA](https://docs.privatepools.network/overview/broken-reference)'s) \
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\- Monetize [Impermanent Loss](https://docs.privatepools.network/overview/broken-reference) and [Toxic Order Flow](https://docs.privatepools.network/overview/broken-reference) (The negative aspects of supplying to LP's that usually see your LP position lose value) \
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\- Monolopize the Volatility Farming landscape&#x20;
{% endhint %}

{% hint style="success" %}
The liquidity you deposit into our ecosystem is used as counter liquidity for rebalancing pools in the arbitrage process. By privatizing the flow of this liquidity we eliminate competition and circumvent middle men meaning we extract more value. \
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The choice is simple, **you can arbitrage with us or be arbitraged by us**. We extract value where value is lost in traditional AMM settings.&#x20;
{% endhint %}

<figure><img src="https://content.gitbook.com/content/rl3dSIdUNdPAk43XA8d6/blobs/8gk7j0qY4Ro3aEi5jBPi/image.png" alt=""><figcaption><p>Private Pools Network leverages your liquidity to extract yield from volatility </p></figcaption></figure>

## High-Level Introduction

A high-level view of the Private Pools Network describes the system as a blockchain-based architecture focused on a fully automated index fund creation, deployment, and management.&#x20;

These Index funds "[Private Index Pools](https://docs.privatepools.network/overview/broken-reference)" (PIP's) are a novel approach to incentivising liquidity and extracting value from external liquidity sources. In short, Private Pools Network can be described the worlds first "Fully Automates, Decentralized, Non-custodial, On-chain Market Maker.&#x20;

PPN's smart contract ecosystem allows the user to deploy liquidity into a wide range of asset compositions ([Indexes](https://docs.privatepools.network/overview/broken-reference)), providing diverse exposure to the crypto market. With automated rebalancing capabilities, our system maintains the assets in the index pools at balance with the open market according to the preconfigured weights while generating yield for our users in the process of rebalancing, achieved through our algorithms via automated arbitrage [trading engine logic. ](https://docs.privatepools.network/ecosystem/architecture/trading-engine)


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