Liquidity Pool

Liquidity Pools are the engine that drives Arkis’s lending and leveraged trading operations. They offer a safe way for lenders to earn passive yields on their assets while protecting them from impermanent loss and market risk. Lenders earn yield on their assets by providing them into Liquidity Pools which power margin trading of Asset Managers.

Key Components

• Lender Contributions

  • Lenders provide their assets to a Liquidity Pool.

  • In return, they earn a passive yield on those assets.

  • There is no impermanent loss or market risk for the deposited assets.

• Interest Rate Model

  • Each pool uses a predefined Interest Rate Model (IRM).

  • This model determines the lending and borrowing rates based on market conditions.

• Supply Token

  • The pool is built around a specific deposit (supply) token (usually USDC, wETH or wBTC).

  • This token represents the primary asset that makes up the pool’s capital.

• Access for Asset Managers

  • Only approved Asset Managers can access the pool.

  • They use the pool’s capital to execute Margin Trading strategies inside of Margin Accounts.

  • Asset Managers can only withdraw assets outside of Arkis protocol only if they provide to the Margin Account the value of collateral bigger than the borrowed amount from the Liquidity Pool (i.e, Overcollateralized Loan).

• Collateral Assets & LTVs

  • The pool includes a whitelist of collateral assets.

  • Each whitelisted asset is assigned a specific Loan-to-Value (LTV) ratio.

  • These LTVs help determine how much can be borrowed against each type of collateral.

• Whitelisted Protocols

  • The pool interacts with selected protocols that are fully vetted.

  • Only these approved protocols can be used by Asset Managers for trading if they borrow through a particular pool.