Supply & Borrow Liquidity

The section below illustrates the liquidity provisioning and borrowing workflows, which can be triggered by Asset Managers or Liquidity Providers, depending on their granted permissions.

Liquidity Provider

Arkis provides staking pools that are compatible with the ERC-4626 interface.

Each pool is wrapped in an Arkis Agreement smart contract, which strictly enforces security and business policies. Below are examples of agreement-level configurations and policies:

• Deposit thresholds;

• Supply APY;

• Leveraged assets;

• Various whitelists, including borrower and lender wallets, supported tokens, pools, and more.

Arkis can configure and deploy a custom OTC Agreement to meet specific compliance requirements, or alternatively, a customer can use widely accepted pools with more flexible constraints.

Supply Liquidity into Staking Pool

Asset Manager

The lending and trading process is fully automated and executed directly on-chain. Arkis provides the infrastructure to enable a secure marketplace for both Liquidity Providers and Asset Managers. Only whitelisted entities can participate in a pool. Arkis does not have control over user funds, except for the liquidation workflow, which ensures that Liquidity Providers recover their funds with interest in cases of Asset Manager misbehaviour or adverse market conditions.

A Margin Account is a specialised smart contract allocated to borrowers. It holds funds borrowed from associated staking pool, along with the collateral provided by the borrower. Arkis’ off-chain infrastructure — including its risk management system — continuously monitors each Margin Account to ensure margin maintenance at all times.

The Asset Manager interacts directly with Arkis DMA to allocate a Margin Account. The process consists of two steps:

1. Collateral transfer and assignment of the Margin Account to a borrower

   1. if there is no available Margin Account, a new instance will be deployed, that can lead to additional cost of the allocation transaction

2. Liquidity transfer and activation of the Margin Account

Activation is always performed by the Arkis Risk Management system to ensure sufficient collateral has been transferred, preventing immediate liquidation of the account. Once the Asset Manager successfully transfers collateral to the Margin Account, the Margin Engine calculates the account's risk value and either fulfils the loan request or reverts the transaction and returns the collateral to the Asset Manager.

Margin Account Activation