Margin Engine

The Margin Engine is the off-chain, high-performance risk computation core of Arkis. It operates as a horizontally scalable service responsible for enforcing portfolio-level margin requirements, calculating Risk Factors, and preparing liquidation plans when thresholds are breached. While Arkis is a decentralized trading ecosystem, the Margin Engine plays a centralized but transparent role in maintaining system solvency and lender capital protection.

Core Responsibilities

1. Real-Time Portfolio Evaluation

   • Continuously monitors all active Margin Accounts (across chains).

   • Aggregates data on borrowed assets, collateral balances, and open protocol positions.

   • Calculates portfolio market value and stress-tested value based on configurable rules.

2. Risk Factor Computation

   • Calculates the Risk Factor for every Margin Account as:

   • Triggers margin call alerts when Risk Factor < pre-defined thresholds.

   • Triggers liquidation execution when Risk Factor < liquidation threshold (e.g. 1.0).

3. Liquidation Planning & Execution

   • Generates a deterministic liquidation plan.

4. Stress-Test Evaluation

   • Applies custom stress scenarios per asset class and pool.

   • Supports:

     • VaR-based simulations

     • Curve LP slippage models

     • Pendle PT maturity modeling

   • Stores and reuses calculated stress values for efficient re-evaluation every 30 seconds.