Tri-Party Collateral Setup Using a Qualified Custodian

As an option, Borrowers, Lenders, Arkis, and a Custodian can interact under a secured credit arrangement — a tri-party configuration Arkis supports for regulated collateral management and expanded collateral options. In this setup, assets are held in qualified custody, Arkis enforces security over the collateral, and Lenders gain enforceable collateral rights upon default.

Arkis supports multiple collateralization pathways: assets can be pledged into a smart contract, a CEX subaccount, or held under a Qualified Custodian.

The tri-party setup balances Borrower control in normal conditions with enforceability for Lenders in default events, while keeping collateral bankruptcy-remote and compliant with institutional requirements.

Overview

In this model:

  • Borrower (Pledgor): Posts digital assets (e.g., stablecoins, liquid staking tokens, LP tokens) as collateral to secure its borrowing or trading obligations.

  • Arkis (Secured Party): Provides credit, liquidity, or exposure and is entitled to liquidate collateral if obligations are not met.

  • Custodian: Acts as a neutral qualified custodian, executing instructions strictly in line with the Account Control Agreement (ACA) and Master Loan Agreement (MLA).

  • Lenders: Extend capital through the MLA and gain collateral backing.

Core Agreements

Two key contracts define responsibilities:

  • Account Control Agreement (ACA): Establishes custody mechanics between Borrower, Arkis, and Custodian. It specifies account setup, control conditions, and instruction execution.

  • Master Loan Agreement (MLA): Governs credit terms, collateral approval logic, margin requirements, and default triggers.

Core Mechanics

  • Collateral Pledge

    • The pledgor transfers supported crypto assets into a segregated tri-party custody account.

    • Assets remain bankruptcy-remote from both pledgor and lender.

    • Ownership does not change, but control rights are shared under the MLA.

  • Eligibility & Valuation

    • The collateral universe is defined (stablecoins, ETH, LSTs, tokenized treasuries, etc.).

    • Valuation is calculated using agreed-upon price oracles and haircut schedules.

  • Control & Substitution

    • The pledgor can substitute eligible collateral with the lender’s approval.

    • A tri-party agent ensures that substitution does not breach collateral requirements.

  • Margining

    • Real-time mark-to-market ensures collateral value stays above required Loan-to-Value (LTV) thresholds.

    • Shortfalls trigger margin calls and potential liquidation rights.

  • Default & Enforcement

    • If the pledgor defaults, the secured party gains control over collateral.

    • The tri-party agent executes liquidation rules neutrally, without discretion.

Collateral Eligibility

Arkis combines the Custodian’s custody coverage with its own risk framework to define the eligible collateral universe.

BitGo Supported Assets

  • 1,600+ assets across 44+ blockchains.

  • Includes native coins and tokens on Ethereum, Solana, Bitcoin, Cardano, Polygon, Avalanche, XRP, Tezos, Sui, Cosmos, and more.

  • Full list →

Arkis Whitelisted Assets

Arkis maintains a whitelist based on liquidity, price reliability, and liquidation safety.

  • Includes stablecoins, Liquid Staking Tokens, BTC-related tokens, yield-bearing tokens, and native tokens

  • Full list →

Strategic Value

  • Borrowers retain flexibility during normal operations; lenders gain enforceable collateral rights upon default.

  • Supports blue-chip coins, LSTs, LPs, and yield-bearing assets under a unified custody structure.

  • Qualified custody and continuous risk monitoring meet institutional compliance expectations.

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