ABOUT ARKIS

Arkis offers undercollateralized leverage by prioritizing capital efficiency within a secure framework, rather than exposing users to undue risk. Here's how it's achieved:

Capital Efficiency: The focus is on enabling sophisticated trading with institutional-grade capital access, where undercollateralization stems from efficient use of capital rather than increased risk.

Zero-Trust Smart Contracts: By utilizing smart contracts as intermediaries between lenders and borrowers, Arkis creates a zero-trust environment. These contracts enforce strict rules, ensuring transactions adhere to predefined terms without the need for mutual trust.

Restricted Operations: Smart contracts limit traders to pre-approved activities within whitelisted protocols, preventing the withdrawal of funds to personal wallets or any unapproved actions. This setup ensures leverage is used responsibly and within a controlled environment.

Through this approach, Arkis manages to provide undercollateralized leverage securely, ensuring capital is used efficiently while maintaining robust risk management protocols

Arkis evaluates risk through its proprietary margin engine, a sophisticated calculations unit designed for comprehensive risk assessment. Here's how the process works:

1. Portfolio and Collateral Evaluation: The margin engine first analyzes the overall portfolio and each collateral type, understanding the value and stability of assets held.
2. Stress Testing and Scenario Analysis: It then conducts stress tests and scenario analyses to simulate how the portfolio might perform under various market conditions, helping to identify potential vulnerabilities.
3. Comprehensive Output: Based on these analyses, the engine produces critical metrics for managing risk, including leverage ratios, initial and maintenance margin requirements, interest rates, and specific risk factors associated with each type of collateral.
4. Real-time Monitoring: While a position remains open, Arkis continually monitors the portfolio, recalculating the risk factor in real-time to reflect current market conditions and portfolio performance.
5. Dependencies: The key factors influencing the risk factor include the assigned loan-to-value (LTV) ratios, the assets involved in trades, and the correlations between those assets. The engine's stress-tested matrix incorporates these dependencies to accurately assess risk.

By integrating these steps, Arkis ensures a dynamic and responsive risk management approach, adapting to market changes and portfolio adjustments in real-time to safeguard against potential losses and optimize the use of capital.

Arkis safeguards lenders through a robust margin and risk management engine that integrates proven practices from traditional finance (TradFi) to ensure effective liquidation protocols are in place. Here's how Arkis protects lenders:

1. Comprehensive Margin/Risk Engine: The core of Arkis's protection for lenders is its advanced margin and risk engine. This engine evaluates trading firms' assets and strategies, setting borrowing limits based on asset quality, liquidity, and the trader's risk profile. It employs dynamic or stress-based margin methodologies to adapt to varying market conditions and trading strategies.
2. Proactive Liquidation Protocols: In the event a trading firm's collateral value declines, the engine triggers a margin call. This requires the firm to either deposit additional funds to maintain the position or face liquidation. This mechanism ensures positions are adequately collateralized, reducing the risk of loss for lenders.
3. Controlled Ecosystem: Lenders' capital is confined within Arkis's controlled ecosystem and is earmarked specifically for providing trading capital. This controlled environment helps in monitoring and managing the capital efficiently, ensuring it's used for its intended purpose and within acceptable risk parameters.
4. Balanced Lending Approach: Arkis's lending model is designed to offer the efficiency of under-collateralized lending while technically maintaining over-collateralization. This is possible due to the platform's stringent control over assets within its ecosystem, allowing for a balanced risk-reward ratio that protects lenders' interests.

By incorporating these elements, Arkis establishes a secure framework that minimizes risk for lenders, ensuring their capital is protected even in volatile market conditions.

Liquidation on Arkis is a streamlined and automated process, tailored to manage risk efficiently while prioritizing fairness. Here's a concise overview of the process:

1. Maintenance Margin Monitoring: Arkis continuously evaluates the maintenance margin for each position, ensuring all trades stay adequately collateralized in line with the platform's risk guidelines by tracking the market value of collateral against the outstanding debt.
2. Automatic Liquidation Trigger: If a position's value drops below the required maintenance margin, signaling elevated risk, the system automatically initiates the liquidation process. This preventive action is crucial for minimizing potential losses for both borrowers and lenders.
3. Liquidation Engine and Plans: The core of Arkis's liquidation framework is its liquidation engine, which is responsible for creating and executing detailed liquidation plans. These plans are designed to liquidate positions in an orderly and efficient manner, aiming to minimize market disruption and maximize value recovery.
4. Internal Liquidation Mechanism: Unlike some platforms that rely on external parties for liquidation, Arkis handles this process internally, utilizing established protocols like 1inch. This ensures that liquidations are conducted promptly and in accordance with Arkis's rigorous risk management practices.
5. No Liquidation Fees or Penalties: Arkis distinguishes itself by not charging liquidation fees or penalties, aligning with its commitment to transparency and fairness. This approach reduces the financial burden on users during market downturns, focusing instead on risk mitigation and user protection.

Arkis's approach to liquidation emphasizes a secure, equitable platform, ensuring effective risk management without imposing unnecessary costs on its users.

Asset managers can use Arkis to enhance strategies and optimize portfolio returns through the following features:

1. Diverse Collateral Options: Utilize a broad range of tokens, including major cryptocurrencies and Curve LP positions, for collateral, allowing tailored strategies based on current holdings.
2. Multi-Token Collateral: Leverage multiple tokens as collateral to spread risk and increase borrowing power, enabling more dynamic investment opportunities.
3. Capital Efficiency: Assets stored in a Margin Account (Smart Contract) ensure optimal use of capital, enhancing liquidity management.
4. Trading and Swapping: Easily swap between collateral and borrow assets using platforms like Curve or 1inch, supporting active portfolio management and quick market response.
5. Yield Farming and Staking: Generate additional returns through yield farming and staking activities on platforms like Lido, Curve, Uniswap V3, Convex and soon Pendle, utilizing both borrowed and collateral assets.
6. Flexibility: The system's adaptability to include any widely traded ERC20 token as collateral opens new opportunities and markets for asset managers.

By leveraging these capabilities, asset managers can develop sophisticated strategies, enhancing returns while effectively managing risk, using Arkis as a versatile platform for digital asset optimization.