We’re excited to unveil the Arkadiko Protocol today, a crypto-collateralised decentralised stablecoin (xUSD, soft-pegged to 1 USD) and lending platform that provides liquidity for all DeFi built on top of Stacks and Bitcoin.
We are in the midst of a gigantic bull market at the time of writing (May 2021), ignited by a mix of institutional money buying bitcoin and others aping into DeFi and NFTs :) We believe that the biggest innovation our space has seen in the last two years is in DeFi, and the way forward to enable the $1 trillion in bitcoin currently sitting idle is through DeFi on Stacks.
A majority of all DeFi is currently built on top of Ethereum. While we believe Ethereum and its ecosystem have done amazing things (think Maker, Aave, Curve, Compound, Synthetix, …), we also believe that such solutions could thrive even more under a Bitcoin standard, scaled by the Stacks blockchain.
Most of the money flowing into bitcoin is not optimally used. Bitcoin is not a rock that should be sitting idle. While bitcoin is protected by the most secure network on earth, the Bitcoin blockchain, the asset itself could be used in a more active way.
Arkadiko will enable your STX & bitcoin to be used for a variety of things, such as collateral to mint stablecoins, borrowing assets or lending out your STX and bitcoin for attractive returns. All of this happens without having to give up custody or the security and hashpower of the bitcoin blockchain. 🚀
When launching later this year (mainnet after summer), you will be able to use Arkadiko for a myriad of use cases. Here’s a sneak preview of what we have in mind:
- Mint xUSD to purchase additional STX for stacking, increasing your stacking APY with another 35 to 50% while limiting downside risk. And don’t worry, your collateral will be stacked by Arkadiko as well!
- Stake DIKO 🍆 — the Arkadiko governance token. There will be 100 million DIKO in existence in the first five years, of which 50 million that can be earned by the ecosystem through staking. In the first 12 months, stakers can earn 25 million DIKO, where we are targeting APYs of 50% and more for early users. Farmers galore!
- To incentivise xUSD creation in the early days, Arkadiko vaults will be eligible for some tasty DIKO as well, resulting in double incentives (mint xUSD -> receive DIKO -> stake DIKO -> receive more DIKO).
- Lend or borrow bitcoin without bitcoin ever leaving the Bitcoin blockchain. The borrower deposits xUSD collateral (say 200% LTV) in the Arkadiko smart contract, which will act as an escrow. When the escrow signals that the xUSD arrived and is locked up, the lender can safely send the bitcoin to the borrower and signal to the escrow that the loan was successfully initiated by posting the TX ID of the bitcoin transaction. The escrow keeps track of the state in its smart contract. Should the price of bitcoin ever go below an agreed upon LTV, the xUSD collateral is simply released to the lender as a liquidation occurs. In normal circumstances, the bitcoin will be paid back by a certain block height, and the escrow releases the xUSD collateral back to the borrower, minus the borrowing cost. All of this is possible since Clarity, the Stacks smart contract language, can read Bitcoin state. One of the many advantages of this amazing little language.
The above is not too good to be true. It is simply true!
We can’t wait to launch Arkadiko and boost applications leveraging stablecoins and lending on Stacks! In the next few weeks, we will release information regarding the testnet launch, our amazing team, the platform, its usage, technical details, how it works, protocol governance, tokenomics details and community involvement opportunities.
Oh, and by the way.. we will be launching our testnet on June 16th, so it won’t be long!
We believe in fair launches. Open-source protocols such as Arkadiko should be community owned and driven. That’s why 50% of all DIKO will be reserved for the ecosystem around Arkadiko to thrive. Arkadiko is built by DeFi users for DeFi users. If you have other use cases in mind, get involved on Twitter or Discord. Now we’re back to building!
Get In Touch
🌐 Visit us at Arkadiko.finance 🌐
💬 Chat with us on Discord (#arkadiko channel) 💬
📚 Read our documentation on Gitbook 📚
🐦 Find us on Twitter — @ArkadikoFinance 🐦