Pool Delegates are funds and industry professionals with assets management or credit experience. If you'd like to explore becoming a Pool Delegate, please connect with the ARKS team here.
Pool Delegates have five core responsibilities, outlined below.
Create Pool and Attract Funding
Once whitelisted, Pool Delegates complete a Pool Delegate Profile to be published alongside their Assets / Lending Pool. This profile will include their background, their strategy for the Pool, and the target yield.
Assess New Capital Demanders / Assets
Interested Capital Demanders create a Request for Quote (RFQ) for a loan / asset tokenization on ARKS. The RFQs are funneled to Pool Delegates who initiate conversations on terms and due diligence requirements. This involves a review of the Capital Demander's reputation, management background, and fund strategy. Pool Delegates may also request Capital Demanders provide a statement of current positions or NAV for confidential review. The Capital Demander's RFQ will propose terms and the Pool Delegate may make a counter-offer.
Agree Terms and Fund Loan / Assets from Pool
Once an agreement is reached between Capital Demander and Pool Delegate, the Capital Demander will create the on-chain funding request and the Pool Delegate will be able to approve a transfer of funds from their designated Pool.
Funding a loan or asset will take idle liquidity from the pool and transfer it into the contract created by a Capital Demander. Once the loan / asset is funded, the loan / asset will be considered to be issued and will start to accrue interest.
Note that during withdrawal windows, Delegates will not be able to fund loans / assets if the value of the request to be withdrawn in the window and the loan / asset amount is greater than idle pool liquidity.
Manage Balance in Pool
While overseeing their Pool, Pool Delegates should be mindful of maintaining a sufficient stablecoin balance in the Pool to enable withdrawals by Investors / Lenders.
Capital Demanders with outstanding loan / asset balances can submit refinance requests to the Delegate, who can accept or deny requests. Accepting a Refinance Proposal will update the contract parameters. It is important to note that issuance date of a refinanced loan / asset will be the date the refinance proposal was accepted.
Delegates can also call loans back early to manage lending balance by Declaring an Early Default. This action will accelerate a loans payment due date to the moment the transaction has been mined. There will be a grace period that needs to pass before a default may be initiated.
Assist in Special Liquidations
If a Capital Demander misses their repayments, the loan / asset can be liquidated by the ARKS smart contracts after a grace period. The Delegate will also move the loan / asset to default state, which will kick off the legal recollection process. For collateralized loans / tokenized assets, liquidations can occur on-chain or OTC to get the best price before the proceeds are transferred back to the Pool.
As part of special situations management, Delegates may declare an early default or liquidate a loan / asset. Liquidating a Loan / asset will default a loan / asset tokenization, liquidate any collateral posted on the loan / assets and will claim First-Loss Capital posted by the delegate up to the liquidation maximum per default (set as a percentage of First-Loss Capital).