Frequently Asked Questions
What is the current status of Arcadia?
Arcadia is now live on Base. You can try it out here https://arcadia.finance/
What is Arcadia?
Arcadia is a two-sided marketplace connecting Lenders with Arcadia Account users (often referred to as Strategy users).
Lenders act like banks. They generate passive income without selling their assets for loaning out assets. Lend out assets are borrowed by Strategy users as a form of leverage to boost their returns.
Strategy users deposit their assets into sophisticated leveraged and delta-neutral strategies that beat staking APRs via an Arcadia Account.
What is an Arcadia Account?
An Account is a user-owned smart contract that holds user's initial deposited collateral and the borrowed funds. An Account can execute logic—swap, borrow, stake, withdraw, repay. Users are able to use their Account to interact with third-party protocols just like they would do with their normal wallet with the difference that the assets within an Account can be used even when they serve as collateral to back debt. The Account holds, manages and liquidates user collateral.
Does Arcadia custody assets?
No, never. The protocol is fully permisionless, non-custodial and open.
Has Arcadia been audited?
The Arcadia protocol has been audited by top security firms including Nethermind, Trust Securities, Renascence (Bytes032/HollaDieWaldfee/MiloTruck), Pashov Group and Sherlock.
How does Arcadia minimize smart contract risk?
We use industry best practices and tooling and strive to have 100% test coverage of our code. Our smart contracts are publicly open. We have performed six security audits prior to launch, and have an extensive set of Foundry (fuzzed) tests available here and here. We also have circuit breakers in place that can detect suspicious contract deployments and transactions. In the event of suspicious activity, an automated pause mechanism is set up minimizing the risk of exploits.
Where does the leverage for Strategy users come from?
Farmers and traders can tap into Arcadia's lending pools to access leverage. The protocol works as a two-sided marketplace connecting users who want to put their idle capital to work by providing liquidity in our pools and earning a passive APY for doing so with users who want capital efficient leverage to boost their financial positions via Arcadia Strategies.
Are gas fees expensive?
We’ve implemented a variety of gas optimization strategies to make the protocol as gas efficient as possible. To put this in perspective, whereas deploying a MakerDAO vault will cost users ~600k gas, users will only pay ~270k gas to open an Arcadia Account. On top of this, we will deploy the contracts on Base L2 to provide users with more gas savings.
Would Arcadia need to have its own trading environment and order book?
No, Arcadia does not need its own order book or trading environment. Since Arcadia is composable we are automatically integrated with existing DEXs, like Uniswap, Aerodrome or Curve. This allows Arcadia to offer its users access to a range of DEXs without having to develop and maintain its own trading environment.
What are the fees I pay?
The Arcadia Protocol itself does not charge any fees. However, there are number of fees paid by Strategy users directly to the Lenders. These include:
A 2.24% liquidation fee on the open debt, a portion of which goes towards:
the actor initiating the liquidation;
the actor that ends the liquidation;
the leftover majority goes directly to Lenders.
An interest rate fee paid by Strategy users to Lenders.
In both instances, the fees are paid directly to Lenders, not to Arcadia.
Swapping assets within an Account may incur a swap fee by the DEX pools the swap is routed through, but is not a fee related to Arcadia.
How do liquidations work?
We rely on MEV bots and keeper networks to liquidate unhealthy Accounts. Anyone can start the liquidation process of an Account when the health factor drops below the liquidation threshold. In return, the liquidator who starts the process receives a percentage of the recovered funds after the auction is finished.
The liquidation itself is carried out using a Gradual Dutch Auction. Arcadia V2 introduces partial liquidations, where a liquidator can liquidate a portion of the collateral held by an Account. This allow liquidators to liquidate Accounts with a health factor below the liquidation threshold without having to liquidate the whole Account.
How can I manually repay the debt of my Account?
Ensure you have the Lending Pool contract address, as well as your Arcadia Account address. The USDC Lending Pool contract address is 0x3ec4a293Fb906DD2Cd440c20dECB250DeF141dF1. The wETH Lending Pool contract address is 0x803ea69c7e87D1d6C86adeB40CB636cC0E6B98E2. If your Account has USDC debt and is USDC denominated, your Lending Pool is the USDC Lending Pool. If your Account has wETH debt and is wETH denominated, your Lending Pool is the wETH Lending Pool.
Head over to Basescan, and look up the numeraire token for your Lending Pool. USDC is 0x833589fCD6eDb6E08f4c7C32D4f71b54bdA02913. wETH is 0x4200000000000000000000000000000000000006. Under the "Write Contract" (or "Write as Proxy") tab, click on "Connect to Web3", then open section "1. approve". In the "spender (address)" field, enter the correct Lending Pool contract address. In the "value (uint256)" field, enter the amount of USDC or wETH you want to repay. Click "Write" and confirm the transaction in your wallet. Note: for USDC, add 6 zeros to the amount. 1000 USDC -> 1000000000. Note: for wETH, add 18 zeros to the amount. 1 wETH -> 1000000000000000000.
Head over to the "Write" tab on the Basescan page for the Lending Pool contract. Make sure your are connected with Web3 on the page. Open section "14. repay". In the "amount (uint256)" field, enter the amount of USDC or wETH you want to repay. Use the same additional zeros here. Do not enter a higher amount than the amount you approved in step 2. In the "account (address)" field, enter your Arcadia Account address. Make sure it's actually the Account you want to repay debt for. Click "Write" and confirm the transaction in your wallet. Note: if you try to repay more than the amount of debt the Account has, you will only pay the debt amount and NOT the full amount you entered. Note: if you want to repay the full amount of debt, make sure to use a sufficiently large buffer to account for the additional debt issued between filling out the transaction and the transaction actually confirming.
Your debt is now repaid.
How can I get involved?
The best way to get involved is to join our Discord.
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