Borrowing
Arkis Margin Engine, Margin Account, Compliance Manager, and Liquidity Pools are core parts of our leverage infrastructure.
Arkis provides leverage to Asset Managers through a robust infrastructure that includes the Arkis Margin Engine, Margin Accounts, Compliance Manager, and Liquidity Pools. This system enables more flexible trading and capital flows, with margin calculated at a portfolio level which can aggregate and offset positions’ risks.
Margin Account
A Margin Account is essential for traders seeking to use leverage through the Arkis protocol. It is a standalone smart contract available on the networks where the trader wishes to operate. Traders choose the leverage asset (such as DAI, USDT, USDC, wETH, wBTC, wstETH, FRAX) and provide the necessary collateral. Traders can have multiple margin accounts in different leverage assets simultaneously, using various tokens as collateral.
Properties of Margin Accounts
Each account is a separate smart contract containing collateral and leverage assets.
Accounts can be established on multiple chains—for instance, starting with Ethereum and then extending to Avalanche. These can be linked for a single portfolio view.
Traders can manage their Margin Accounts similarly to how they manage their personal portfolio or MetaMask wallet, with the ability to swap, stake, or provide liquidity.
Each Margin Account acts like a proxy to a wallet and can be used via Wallet Connect to interact with integrated DEXs/Protocols.
Performance, NAV, and ransactions for each chain can be tracked separately using Etherscan or respective blockchain explorers.
Compliance Manager
The Compliance Manager regulates the venues, DEXs, protocols, tokens, and transactions permissible within a Margin Account. It ensures traders cannot engage in high-risk activities with non-whitelisted tokens or unauthorized DEXs. The Compliance Manager defines:
Approved protocols/DEXs/Venues for trading.
Allowed actions and smart contracts for execution.
Whitelisted tokens for use on DEXs.
For each new protocol integration, the integration pipeline happens in two steps:
Add actions and adapters to Arkis Protocol.
Add logic of portfolio monitoring and stress-testing to Arkis Margin Engine.
Arkis Margin Engine
This centralized analytics module calculates the initial and maintenance margins for opening and maintaining leveraged positions. If a maintenance margin exceeds the collateral value, liquidation is initiated.
Liquidity Pools
Liquidity Pools These pools provide the liquidity necessary for leverage, supporting multiple tokens and protocols across various networks. This setup facilitates multi-protocol leverage operations.
How to Borrow
Choose the Chain and Token: Decide where and what to borrow. You can link positions across chains after opening them.
Select the Pool Type: Choose between Base (higher borrow APY) and Profit-Sharing (lower borrow APY but requires sharing a percentage of profits upon closing the account).
Provide Collateral: Determine the borrowed amount and collateral. Collateral must be from the list of Arkis Whitelisted Tokens. It’s advisable to maintain an initial Risk Factor greater than 1.5 to avoid liquidation.
There is a minimum collateral value needed, which a trader needs to submit to be eligible to open a position. However, we strongly recommend having an initial Risk Factor > 1.5 to maintain a healthy position and not be liquidated.
Once the minimum collateral value is satisfied, a Trader can modify the number of tokens submitted and see the initial portfolio Risk Factor.
A trader can open LP positions on integrated protocols, swap, and trade using Wallet Connect.
Monitor Margin Account
Through the Arkis dApp, track the Risk Factor, a crucial metric determining whether a portfolio should be liquidated. A Risk Factor below 1 triggers the liquidation process by Arkis Protocol.
Risk Factor calculations are described in detail in Margin Engine Whitepaper.
Repay the loan
To close a Margin Account, ensure your wallet has sufficient borrowed assets plus interest for repayment. Repayment back to the Liquidity Pool releases all whitelisted tokens and positions back to the trader’s wallet.
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