Arcadia Finance

Flash Actions and active collateral management

The active management of collateralized assets in Arcadia refers to a user's ability to use the assets held by the account as if they were in the user's own wallet (stake, withdraw, swap, claim, vote). Assets can be actively managed even when these assets are used as collateral to back debt. In other words, an Arcadia margin account is similar to a smart contract wallet, where a user can use both their own assets and credit to perform actions on-chain.
At the smart contract level, the actions work in a similar fashion to how flash loans work, with the difference that we expand the scope of it to introduce ‘Flash Withdrawals,’ a novel type of financial transaction only available on blockchains, and we make it available for all users through our dApp. For example, in one single transaction a user could:
  • Withdraw any asset from their margin account (flash withdrawals).
  • Borrow as much assets as they want (flash loans).
  • Use both the withdrawn assets and the borrowed funds in a permissionless way in other DeFi protocols.
The only requirement is that at the end of the transaction the whole margin account is brought back to a healthy state: 1) The recipient token(s) that result from your interactions are allowed in the protocol as collateral and deposited back; 2) Their resulting value covers all liabilities.