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ARKS Overview

A short overview of ARKS's key mechanics
ARKS is a decentralized liquidity management protocol that mainly involves three aspects of NFT businesses: real estate infrastructure industry, US Treasury bonds, and structured loans. The protocol allows users to engage in first-buy-later-pay borrowing and use existing NFTs as collateral for obtaining liquidity assets, even while still enjoying all off-chain asset returns during the borrowing period.
The current core limitation in the real estate infrastructure industry, US Treasury bonds, and structured loans is the monopoly of traditional large-scale real estate developers and financial institutions, which makes it difficult for most individuals to participate using personal funds.
By constructing on-chain NFTs and adhering to the principle of "gaining trust through consensus," ARKS protocol provides users with three types of NFTs that can bring real off-chain asset returns: real estate infrastructure industry, US Treasury bonds, and structured loans. Users can freely choose which type of NFT to invest in and can also choose any amount to purchase, making it possible for the vast majority of users worldwide to participate.

Participants

The ARKS protocol has six key roles: senior players, junior players, investors, borrowers, Capital Demanders in real world,and Pool Delegates. In addition, whether they are senior d players, junior players, investors or borrowers, they all participate and hold the development of the protocol, and eventually receive corresponding token rewards. You can find more details about these roles and their incentive measures (APY, rewards, etc.) in the protocol mechanism section of the documentation.
  • Senior Players (lower-risk liquidity providers): participants who provide USDT to borrowers, enjoy higher liquidity in the funding pool but receive lower interest returns.
  • Junior Players (higher-risk liquidity providers): participants who provide USDT to borrowers, enjoy higher interest returns but are more likely to face the problem of inability to withdraw funds.
  • Investors: participants who directly purchase NFTs and enjoy all the benefits of off-chain assets.
  • Borrowers: participants who seek financing from ARKS to purchase NFTs or obtain liquidity assets by mortgaging NFTs.
  • Real-world Capital Demanders: companies and organizations in developing regions seeking global financing through ARKS' structured credit protocols.
  • Pool Delegates: Pool Delegates are funds and industry professionals with assets management or credit experience, who are responsible for creating Pool , attracting funds, assessing new Capital Demanders etc.

The Working Principle of ARKS

ARKS' main business is divided into three categories: real estate infrastructure industry, U.S. Treasuries, and structured loans. The protocol reflects the real returns of these three areas in the corresponding NFT tokens to help investors obtain real off-chain asset returns. The required off-chain capital also corresponds to the purchase value of the NFT token. This approach breaks the monopoly of traditional large real estate developers and financial institutions, allowing more users to participate in investments in these areas.

Liquidity-Risk-Based Tranche Lending Pool (Mode 1)

The borrower pool smart contract has junior and senior components, which together account for 100% of the capital in the borrower pool. Junior players provide funds to the junior tranche, while senior players provide funds to the senior tranche.
When borrowers repay interest, the interest will be divided into the junior and senior tranches at different ratios, with the junior tranche receiving more interest than the senior tranche when holding the same amount of funds.
For details on interest distribution, you can find more information in the protocol mechanism section of the document.
To track the different amounts provided by junior and senior players, they receive ARKS-Jr and ARKS-Sr tokens that represent their deposits when providing funds.
Senior Tranche LP provides equivalent ARKS-Sr tokens to senior players, which are ERC-20 tokens representing their positions. As interest is injected into the lending pool, the quantity of ARKS-Sr automatically increases. At any time, senior players can withdraw their position in the senior pool through ARKS-Sr.
Junior Tranche LP provides equivalent ARKS-Jr tokens to junior players, which are ERC-20 tokens representing their positions. As interest is injected into the lending pool, the quantity of ARKS-Jr automatically increases. At any time, junior players can withdraw their position in the junior pool through ARKS-Jr.

The junior pool and senior pool in the Assets Pool's structured loan products (Mode 2)

In response to the potential demand from borrowers in the future (applied to providing inclusive finance and green finance services such as structured off-chain loans and supply chain financing to small and medium-sized enterprises in developing regions) for larger loan pools, ARKS users can provide funds to these pools. Users can provide funds directly to the primary fund pool or indirectly through the protocol's automatic fund allocation (through leveraged automatic allocation in the senior fund pool). These borrowing companies extract stablecoins-USDT from the fund pool. Borrowers then exchange USDT into fiat currency and deploy it to the final borrowers in the local market. The principal and interest of the loan will be returned to the borrower pool on time after the borrower obtains the corresponding income. In this way, the protocol provides the utility of cryptocurrencies - especially its access to capital globally - leaving funds to the most capable enterprises to create wealth.

Token

ARKS has four native tokens: ARKS, ARKS-Jr, ARKS-Sr, and veARKS. Both follow the ERC20 standard. In addition, the protocol uses stablecoins (currently only USDT) for investments and loans.
ARKS is the core native token of ARKS. ARKS is used to purchase NFTs, provide liquidity for senior and junior players, finance borrower needs, and incentivize collateralized borrowing and lending. It can also be deposited into the governance treasury to earn protocol rewards and receive veARKS for participation in the future development of the protocol.
ARKS-Jr is a token that represents the deposit made by liquidity providers when providing USDT to the junior fund tranche. When junior players provide funds, they receive equivalent ARKS-Jr tokens. ARKS-Jr can be withdrawed into USDT at any time through the Account interface, minus a withdrawal fee of 0.5%. The exchange ratio with USDC/USDT always maintains at 1:1
ARKS-Sr is a token that represents the deposit made by liquidity providers when providing USDT to the senior fund tranche. When senior players provide funds, they receive equivalent ARKS-Sr tokens. ARKS-Sr can be exchanged into USDT at any time through the Account interface, minus a withdrawal fee of 0.5%. The exchange ratio with USDC/USDT always maintains at 1:1
veARKS is the governance token of ARKS, obtained by staking ARKS, and used for revenue sharing and protocol governance.

DAO

ARKS is a decentralized, community-driven and community-managed protocol. Governance is managed by the community DAO and has the ability to maintain functions and adjust parameters through governance voting, including:
  • Upgrading contracts
  • Changing protocol configurations and parameters
  • Choosing off-chain entity suppliers
  • Setting rewards and ARKS distribution
  • Suspending protocol activity in emergency situations
  • Launching new projects and collaborating with third parties.
You can find more details about this in the DAO section of the documentation.