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$USDA

$USDA Due Diligence Report

Arkadiko is a unique project for ALEX to collaborate with, given that they are very well known in the Stacks community and were the first DeFi platform to launch on Stacks.

What is Arkadiko :

Arkadiko is a decentralized, non-custodial liquidity protocol where users can collateralize their STX tokens and borrow a stablecoin called USDA. This enables you to gain increased liquidity in the form of a soft-pegged US Dollar stablecoin, while maintaining original asset exposure. Your STX tokens generate a yield, which pays back the USDA loan automatically over time. At current yields, it takes about 3 years to pay back your loan completely. No need to worry about monthly payments.

What is $USDA:

The Arkadiko protocol trustlessly provides stable loans backed by Stacks Tokens (STX), known as USDA. In order to mint USDA, you need to over-collateralize Stacks (STX) tokens into an Arkadiko Stacks Vault. In other words, USDA is a stablecoin, existing to maintain relative price stability in volatile markets.

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Stablecoin Risk Parameters

  • Debt Ceiling: A Debt Ceiling is the maximum amount of debt that can be created by a single collateral type. Arkadiko Governance assigns every collateral type a Debt Ceiling, which is used to ensure sufficient diversification of the Arkadiko Protocol collateral portfolio. Once a collateral type has reached its Debt Ceiling, it becomes impossible to create more debt unless some existing users pay back all or a portion of their Reserve debt.

  • Stability Fee: The Stability Fee is an annual percentage yield calculated on top of how much USDA has been generated against a Reserve's collateral. The fee is paid in $STX and then sent into the Arkadiko Buffer.

  • Liquidation Ratio: A low Liquidation Ratio means Arkadiko Governance expects low price volatility of the collateral; a high Liquidation Ratio means high volatility is expected.

  • Liquidation Penalty: The Liquidation Penalty is a fee added to a Reserve's total outstanding generated USDA when a Liquidation occurs. The Liquidation Penalty is used to encourage USDA owners to keep appropriate collateral levels.

Tokenomics

There is no formal Tokenomics paper.

Elements of their tokenomics are available throughout their docs page, particular in the “DIKO” and “Incentive and Rewards” sections:

Security Audit

Arkadiko had the security audit done by ZeroF

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