Arkis Overview
A short overview of Arkis's key mechanics
Intended User Base
As we explore the functionalities and offerings of the Arkis Protocol, it's important to identify and understand the key roles and participants within the DeFi trading ecosystem.
Asset Managers
The primary users of Arkis Protocol are Asset Managers. These individuals or entities seek to leverage undercollateralized borrowing options to maximize capital efficiency for their trading strategies. Such strategies might include opening leveraged positions in liquidity pools, executing leveraged trades (both long and short), and hedging exposure. The core objective for Asset Managers is to optimize the return on investment capital through efficient, swift, and dependable strategies.
Lenders
The provision of leverage to Asset Managers necessitates a source of capital, fulfilled by Lenders. Lenders are typically liquidity providers who seek a stable return on their assets, such as tokens or stablecoins, by offering them to leverage traders. They contribute their capital to liquidity pools, which in turn facilitates the leverage provided to traders.
Key Mechanics
The Arkis Protocol and Margin Engine
The Arkis Protocol and its accompanying Arkis Margin Engine are designed to facilitate the seamless provision of leverage between Lenders and Asset Managers. This coordination ensures that:
Leverage Traders have access to cross-chain, undercollateralized leverage for their trading assets, enhancing their ability to execute diverse trading strategies across different blockchain ecosystems.
Safety of Lenders' Funds is a priority, with mechanisms such as proper liquidation processes in place to protect the capital provided by Lenders.
Interest for Lenders: By contributing their capital to liquidity pools, Lenders not only facilitate leverage trading but also earn interest on their investments. Furthermore, Lenders have the option to increase their returns by participating in Profit Sharing Pools, where they can share in the profits generated by Leverage Traders in exchange for better borrowing terms for those traders.
Fee Structure: The Arkis Protocol generates revenue through the fees collected from the spread between leverage lending and borrowing APY.
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