Arkadiko is a decentralized, non-custodial liquidity protocol where users can collateralize their assets and mint a stablecoin called USDA.

Arkadiko is a Decentralized Finance primitive which means it is a building block for other types of decentralized applications. The protocol is open-source, on-chain and permissionless.

Arkadiko's core use case are Arkadiko Vaults, where collateral can be locked to mint a soft-pegged, dollar-denominated stablecoin called USDA. In order to make Vaults work, several mechanisms have been put in place to safeguard the overal health of the system.

A Liquidation Pool exists where anyone can deposit USDA on stand-by to be used when a Vault needs to be liquidated.

A Redemption mechanism exists that allows anyone to exchange USDA for 1 USD worth of collateral in Vaults, minus redemption fees. This enables an arbitrage loop that keeps the peg healthy.

Arkadiko Swap exists as a primitive AMM for USDA-denominated pairs. Its main liquidity pairs are STX/USDA and DIKO/USDA. The LP tokens from the Swap can be staked to receive a share of DIKO emissions.

DIKO is the native governance token of Arkadiko. Its primary purpose is to create or vote in DAO proposals.

The following diagram shows the different types of functionality and tokens within the Arkadiko ecosystem:

USDA is extra liquidity which can be used within the Stacks DeFi ecosystem. Some potential uses of USDA:

1) Swap USDA in USDA-denominated liquidity pools to another token, such as more STX.

2) Provide liquidity to asset pools on a Decentralized Exchange or Automated Market Maker. Earn trading fees from swaps that occur within the pool.

3) Deploy USDA into various liquidity mining farms. Tokens from other protocols often launch by attracting liquidity and distributing tokens pro rata the liquidity provided.

4) Deposit USDA to a lending protocol on Stacks. Lender receives interest payments by borrowers

5) Deposit USDA into an automatic liquidator for Arkadiko Vaults. Learn more in Liquidation Pool .

In all cases, there is the opportunity to profit by owning USDA and putting it to productive use within the DeFi ecosystem on Stacks.

Last updated