From Entity to Protocol: How Arkis is Decentralizing Prime Brokerage

Editor's note, October 2026: This post was published in November 2024 and describes the protocol model Arkis followed at the time. Arkis now works as an institutional prime broker that margins CeFi, DeFi and TradFi positions as one portfolio. Client collateral for centralized venues stays in Copper's custody, off the exchange, and Concourse gives clients one onboarding to more than 20 OTC derivatives desks. Arkis has deployed more than $400 million in credit. More on Arkis today.

We’re reimagining prime brokerage—not as a centralized platform but as a highly customizable protocol. Arkis is designed as a secure ecosystem for seamless, secure interactions to the decentralized economy—for asset managers, capital providers, and credit managers. We offer Prime Brokerage-as-a-Service, meaning Arkis is built as a protocol, not a controlling body.

In traditional finance, prime brokerages function as centralized institutions with corporate governance, oversight, and decision-making power over their clients. DeFi, by stripping away these intermediaries, shifts the focus from centralized institutions to decentralized, trustless instruments that allow users to conduct financial operations without "entities" in the conventional sense. Arkis offers users a “walled garden” built entirely out of smart contracts that provides direct access to prime brokerage services—free from the entanglements of a centralized structure.

This isn’t just semantics; let’s explain how Arkis is decentralizing prime brokerage, from entity to protocol.

The Role of Entities in Traditional Finance

In traditional finance, the system is built on entities—distinct organizations that not only provide services but also exercise control, oversight, and decision-making—like JP Morgan and Goldman Sachs are the pinnacle of this model. They are centralized institutions where every client interaction, risk management process, and compliance measure is managed by the entity itself. These brokerages make decisions on behalf of clients and onboard them through specific criteria. With this approach, you get structure and control, but you add layers of complexity and oversight.

It’s not just TradFi, though; this entity-based model extends to centralized finance (CeFi) platforms like Hidden Road and FalconX. Centralized bodies function as entities, meaning they control user funds and make operational decisions on behalf of their clients. This setup inherently limits transparency and user autonomy—a large part of crypto’s ethos. These entities have the power to freeze accounts, adjust policies, and otherwise control access to funds, just like normal banks.

Instruments in DeFi

Decentralized finance (DeFi) shifts away from the traditional, entity-based control model by replacing centralized oversight with autonomous instruments that facilitate user interactions directly within closed systems. In DeFi, users interact with protocols through tools they can trust to function predictably and transparently without requiring a centralized entity to approve actions. These are truly user-centric systems.

For example, Uniswap serves as an instrument rather than an entity. Users interact with Uniswap’s liquidity pools directly, executing trades and providing liquidity without the need for an intermediary to govern or oversee their actions. When you use Uniswap, you rely on trustless code to facilitate transactions, not Uniswap, the organization.

Smart contracts, which are fundamental to DeFi, power these interactions. Consider Aave, a DeFi lending protocol. Through Aave’s lending pools, borrowers and lenders connect directly with smart contracts that automatically execute loan terms based on predetermined code parameters. There’s no central organization determining who receives a loan or managing the assets directly; instead, the system operates autonomously, with smart contracts enabling all transactions. That means no human intervention, bias, and delays.

Arkis as an Instrument, not an Entity

Arkis brings this concept of instruments into the prime brokerage space, operating not as an entity but as a facilitative tool that supports credit funds and enables secure, seamless interactions. This structure focuses on three core actors:

• The Asset Manager – who borrows, trades, and hedges within DeFi markets to generate yield and build credit portfolios.

• The Capital Provider – who supplies capital to earn interest.

• The Credit Manager – who attracts capital providers, underwrites, and forms credit agreements with specific borrowers through Arkis’s smart contracts. Use of the Arkis protocol is highly customizable, meaning Credit Managers can build their own credit fund or prime brokerage on top of it.

Unlike traditional brokerages, Arkis doesn’t control the flow of funds or make intermediary decisions. Instead, it empowers Credit Managers to create an onchain representation of their credit fund, using our Prime Brokerage-as-a-Service infrastructure, which functions as a permissioned, neutral credit settlement layer —providing key tools like margin accounts, liquidity pools, and embedded repayment flows.

For credit funds, Arkis’s setup is particularly advantageous, as it sidesteps the “black box” nature of traditional prime brokers that may carry balance sheet risk. Arkis instead offers a transparent model, integrating a sophisticated DeFi Portfolio Margin experience for traders and a reliable credit vehicle complete with a built-in liquidation engine.

What This Means for You, the User

When you interact with Arkis, you’re directly in control—managing assets, executing trades, and handling credit arrangements without needing approval or oversight from a central body. It’s like the shift from department stores to self-service platforms like Shopify, where individuals have the freedom to build their own shops, set their own terms, and keep more control over their operations.

In this model, Arkis isn’t an institution imposing structure but a protocol that is adaptable to each user’s needs, whether you’re an asset manager setting up a credit fund, a capital provider lending for yield, or a credit manager handling margin calls. Everything operates through self-executing smart contracts, with Arkis taking on no balance sheet exposure; borrowers and lenders do not face Arkis as a counterparty. With Arkis, DeFi users gain a level of autonomy and transparency that’s hard to find in traditional finance or even CeFi. Trust is shifted from corporation to code.

Here are some things you can do within Arkis:

• Embed investment or credit agreements directly on smart contracts

• Create margin accounts tailored for borrowers

• Whitelist assets, protocols, liquidity providers (LPs), and other elements required for your desired exposure

• Modify risk engine parameters to add an extra margin of safety, if necessary

Case Study: Arkis vs. Traditional Prime Brokerages

In Arkis, users operate autonomously, executing trades, lending, and borrowing directly through smart contracts. This interaction is immediate and seamless, requiring no third-party approvals or institutional oversight. For asset managers, Arkis recreates a Direct Market Access (DMA) experience in DeFi, enabling users to move assets, establish credit agreements, and leverage multiple protocols within the ecosystem—all without third party (Arkis) intervention.

Users operate in a fully decentralized manner, where Arkis functions as an infrastructure layer—a “walled garden”—rather than an intermediary. Users don’t engage with Arkis as a counterparty, and Arkis does not intervene or hold assets on its balance sheet. Within the walled garden, only approved and vetted actors can participate autonomously. 

Take this example: A DeFi fund manager utilizes Arkis to manage their margin accounts and interact with DeFi protocols. Instead of executing trades through Arkis, the manager trades directly on other protocols, while Arkis’s infrastructure seamlessly handles the underlying account mechanics. Arkis’s smart contracts enable these interactions to occur transparently and securely, without the need for manual reconciliation by a centralized entity.

In traditional finance, a fund manager has to work through multiple layers of intermediaries, each adding its own counterparty risk. Every time an intermediary—whether it’s a prime brokerage, a clearinghouse, or a custodian—gets involved, it means another party is holding some control over assets and transactions. With Arkis, transactions happen directly through smart contracts, no third-party intervention needed. Here, asset managers, capital providers, and credit managers can interact in a secure, permissioned environment where they’re in full control.

We envision a financial system that’s user-centric and scalable, with Prime Brokerage-as-a-Service at its core. Arkis offers users a walled garden where users can manage assets, generate yield, and engage in credit operations without the typical limitations of centralized finance.

Our model provides a practical framework for the prime brokerage experience to meet modern needs for efficiency and user control—needs defined by flexibility, scalability, and trust in technology over centralized authority.