> For the complete documentation index, see [llms.txt](https://docs.arcadia.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.arcadia.finance/protocol/arcadia-creditors.md). # Arcadia Creditors An Arcadia Creditor is a (set of) smart contract(s), that does the accounting of the liabilities between debtors (Margin Accounts that owe the liabilities) and one or more ultimate creditor(s) (the addresses that are owed the liabilities). An example of an Arcadia Creditor is a Lending Pool, where the Arcadia Accounts are the debtors that can borrow funds from the pool, and the Liquidity Providers of the Lending Pool are the ultimate creditor(s).\ Other examples are perpetual futures contracts, options contracts, escrow services... Basically every financial contract or protocol where a party has, or can have, liabilities can be implemented as an Arcadia Creditor. The liabilities of each Debtor are fully secured by the collateral held in the users' Arcadia Margin Account. ## Accounting Liabilities The Arcadia Creditor must know the Open Position (how much liabilities they owe) of each Margin Account at each point in time. The open position is used for the margin calculations to determine the health state of the Arcadia Account of Debtor. In turn, this guarantees that all liabilities can be paid back to the Creditor. An Arcadia Creditor must denominate these open position in a certain numeraire. This represents the unit of accounting, for example USD, USDC or ETH. The Arcadia Account of the Debtors will use the same numeraire for the margin calculations. ## Risk Management The Creditor must set a [Risk Manager](/security-and-risk/roles.md). The Risk manager can be both an EOA or a smart contract. The Risk Manager is responsible for choosing which assets can be used within the Debtors Margin Accounts and for setting the correct [Risk Parameters](/security-and-risk/risk.md). For each asset the Risk Managers allows, they have to set the following Parameters: * The Collateral factor * The Liquidation factor * The exposure cap of the asset * The exposure cap of any integrated protocols, such as DEXs The Risk Manager must ensure the credit risk borne by the Creditor remains acceptable. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.arcadia.finance/protocol/arcadia-creditors.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.