Arkadiko x Satoshi Club AMA Recap from the 18th of October

Arkadiko x Satoshi Club AMA Recap from the 18th of October

Hello, Satoshi clubbers! Another AMA took place in Satoshi Club and we would like to introduce to you the AMA session with our friends from Arkadiko and our guests, @philipds and @xmrpx1. The AMA took place on the 18th of October.

The AMA session was divided into 3 parts with a total crypto reward pool of 500$.

In this AMA Recap, we will try to summarise the most interesting points for you.

Part 1 — introduction and questions from the Telegram&WebSite

Mary | Satoshi Club: Hello Satoshi Club! We are happy to announce our AMA session with Arkadiko! Welcome to Satoshi Club😀 Our guests today are @philipds and @xmrpx1😄

Jonah 🏅🎹 | Satoshi Club: Hello guys, welcome to Satoshi Club!

Pieter: Hi everyone🙂

Mary | Satoshi Club: Welcome here😀

Philip: Hi everyone!:)

Mary | Satoshi Club: Happy to see you here👍 How’s going?

Pieter: Extremely excited for the launch, but busy!🙂

Mary | Satoshi Club: Oh, I only can imagine!😀 Let’s start our AMA then🚀

Guys, could you please introduce yourself and tell us more about Arkadiko?😀

Pieter: Sure! My name is Pieter, I just turned 30 and live in Belgium. Me and Philip met at university where we both studied computer science, already a while ago now🤔

Philip: That is over 10 years ago!

Mary | Satoshi Club: Oh, you’re close friends👍

Philip: We’re close enough friends that we can shout at each other without the other being upset for weeks 😉 lmao

Pieter: Luckily, we haven’t been in this situation too much😛

Jonah 🏅🎹 | Satoshi Club: I like that😁

Pieter: There is so much to tell about Arkadiko…Where do I start? I believe it is a first essential step to establish a De-Fi hub built on Stacks, which in turns builds on Bitcoin, our beloved asset of choice.

Mary | Satoshi Club: Is it first De-Fi that was built on Stacks?

Pieter: We think so, there are some other initiatives but I think nobody is launching this week and we are certainly the most complex piece of software on the network.

Mary | Satoshi Club: Awesome! You are pioneers! Who helps you to build your De-Fi hub? How big is the Arkadiko team?

Pieter: Our core team is 4 members, me as mostly the De-Fi designer/documenter, then Niel and Philip who have written smart contract code together. And then there is Maxcim who is our designer/front-ender. We also have Lout and Charlotte who manage the community.

And we get a lot of help from others in the community, especially Louise and GM Chung!

Mary | Satoshi Club: Wow, you did so much work with only six team members😀

Pieter: Yea the quality of our members is very high🙂 Philip and Niel are incredible engineers.

Mary | Satoshi Club: My applause for you👏👏👏

Pieter: I’m really lucky to work with them.

Jonah 🏅🎹 | Satoshi Club: The quality of what they can offer beats numbers👏

Pieter: It certainly does, in software development, less is often more.

Mary | Satoshi Club: Thank you for your intro, guys! We choose 6 questions from our community for the first part and they’re waiting for you😀 Ready?🚀🚀🚀

Pieter: Yes shoot!

Q1 from Telegram user @Jmagsss:

The stablecoin yield within Arkadiko’s platform came from the project “Stacks” and its consensus called PoX or “Proof-of-Transfer”. Are you affiliated with Stacks and their management team? Why did you choose to base the yield generation of stablecoins to their consensus? Does Stack has authority and part of Arkodiko’s governance team?

Pieter: Excellent question. We are not affiliated at all with Stacks or the management team. Decided on Stacks because of the PoX yield on the asset and its unique relationship with Bitcoin. We also saw an opportunity to build something where nothing was built before. So they are not part of the team and not hold any authority at all. Now of course, the Stacks network, on which we are built, has their own consensus mechanisms. Every application building on a blockchain will ultimately be reliant on that blockchain performing as intended. I think as long as Stacks follows the Bitcoin ideology of decentralization and censorship resistance, we will be fine.

We think that every Layer 1 blockchain can benefit from a native stablecoin backed by the Layer 1 asset. If that asset has built-in yield, even better.

That being said, we did a strategic raise and a few key community members from Stacks invested in that. So through Arkadiko governance, they will be able to voice their opinion.

Mary | Satoshi Club: Yes, it makes sense😀 So, you will bring to Stacks their first stablecoin?)

Pieter: Yes and more importantly, we increase the utility of STX as you will be able to use it to mint the stablecoin USDA.

So in the past you had 10k worth of STX, now you can have 10k worth of STX + 2.5k worth of USDA. Almost like magic🙂

Jonah 🏅🎹 | Satoshi Club: Lovely!

Philip: I would like to add a little something about the yield generation of our stablecoin. It comes from Proof of Transfer in Stacks indeed and is generated in Bitcoin, one of the scarcest assets we know as humans and the hardest money ever invented 🙂

One of the reasons to go with Stacks was that exact source of yield. If you compare the yield coming straight from the consensus mechanism to other yield-generating protocols, you will notice that the risk on PoX yield is one of the lowest in the industry!

Mary | Satoshi Club: But you can also admit that all the risks of yield on PoX are not yet known😀 Because for Stacks everything is just beginning, this layer is still quite young)

Philip: Agree. Basically as long as Stacks blocks get mined, the source of the yield is safe.

Pieter: Absolutely true, I want to stress this point: Arkadiko is very experimental and I would advise caution to anyone intending to use it. This is extremely high risk and only put in what you can afford to lose.

Mary | Satoshi Club: That’s the main rule in crypto😀

Pieter: Correct, it is true for anything really.

Jonah 🏅🎹 | Satoshi Club: Yeah, nobody is ready to get burnt😁

Mary | Satoshi Club: Thank you for your answers, guys! Ready for the next question?🎉

Pieter: Yes let’s go!

Q2 from Telegram user @Pavel_Jarosh:

Talking about the governance token DIKO, it is said that half of the DIKO supply is distributed as ecosystem incentives over the coming five years through liquidity mining programs. Could you specify the exact ditribution plan of these 50% of DIKO supply? Are the additional open sales scheduled throughout the 1st or the 2nd year? Are there any additional incentives not mentioned in your whitepaper planned for the first five years where the token is planned to be distributed? Thank you!

Pieter: Yes, so the documentation (found at docs.arkadiko.finance) has a very explicit schedule that can be viewed there.

Not sure what is exactly meant with open sales.

Philip: See here: https://docs.arkadiko.finance/protocol/incentives-and-rewards/emission-schedule

Mary | Satoshi Club: I will ask how I understood😃 Will you have any IDO, IEO etc?

Jonah 🏅🎹 | Satoshi Club: I believe the interest of the user is in knowing how he can get some DIKO.

Pieter: Maybe an important point to make: What we designed/proposed in the docs is our current plan. But Arkadiko will be DAO, which means that plans can change, emissions schedules could change if the majority decides this is beneficial.

You will be able to get DIKO when we launch later this week. Our strategic sale investors will be posting liquidity on Arkadiko Swap, through which you can swap either STX or USDA to DIKO.

Philip: Additionally we have a liquidity mining program, I think Pieter can elaborate on that one.

Mary | Satoshi Club: Yes, we love such programs😉

Pieter: Yes, the first 6 weeks you will be rewarded for minting USDA and depositing STX into Vaults.

And either way, the liquidity pools on Arkadiko are all incentivized with DIKO rewards.

Best way to farm completely risk-free from DIKO price exposure would be STX/USDA pool.

Jonah 🏅🎹 | Satoshi Club: How many Vaults will you have?

Pieter: Well there are two types of Vaults, but both take STX, the parameters are a bit different. But they are quite similar. Also, a user should not have to open more than 1 Vault.

We plan to have xBTC Vaults in the future🙂

Jonah 🏅🎹 | Satoshi Club: Oh ok…do you have a reason for this?

Pieter: Well, a user certainly can create more Vaults but I don’t really see the benefit from this. Ultimately, what matters is your deposited Vault value, whether its in 1 or more Vaults doesn’t really matter.

Jonah 🏅🎹 | Satoshi Club: Yeah, the Value is what matters most!

Mary | Satoshi Club: Very clear🔥

Thank you for your answers! Ready to go to the next question?🚀

Pieter: Yes🙂

Q3 from Telegram user @JesusFre1tes:

In Arkadiko Finance, how does a loan with self-liquidation work? To be able to make use of a self-liquidation loan, you must have STX tokens? There are many decentralized lending models that have been developed so far, in the case of Arkadiko, what are the main differences between your model and the other existing ones? I am struck by the fact that your loans have “self-liquidation”, can you explain in detail what this means for users and how it will help to improve the experience of decentralized lending within Arkadiko Finance?

Pieter: Well Arkadiko has self-repaying loans, the liquidations are handled by a separate system.

Self-repaying loans comes from the idea that the yield on your STX from PoX is higher than the interest you pay on the USDA mint.

Liquidations are quite complex (Philip designed these) and involves tagging a Vault for auction if it becomes under-collateralized. Then anyone on the Stacks network can bid for the collateral in the Vault. Some of our investors are stepping in as the first providers of this liquidator service, ensuring that the protocol stays healthy at all times.

Philip: Yes, I think @JesusFre1tes meant “self-repaying” here.

Pieter: I think a good sister-project would be MakerDAO, we modelled some parts of our system in resemblance to them.

Mary | Satoshi Club: Yes, I was very excited to see self-repaying, but after the words self-liquidation, I am a bit scared😃

Philip: Pointing out: the STX you deposit are always over-collateralised, meaning you borrow less than what you deposit. But as a nice benefit (or side effect), your yields are way higher (in absolute numbers) than the dollar amount that you owe (i.e. that you borrowed). As a result, we can use that yield to automatically pay off your loan.

All of this happens without monthly payments and it can happen automatically by the protocol. But indeed, there is still a risk of liquidation in case a big market correction would happen and your STX deposit becomes insufficiently collateralised.

Now image a big market correction happens, you will still have time to deposit extra STX to get your Vaults in a healthy collateralisation state again.

Pieter: Yea or pull some USDA from farming and repay a part of your loan.

Pieter: Both methods work.

Philip: The DAO will be launching with 25% LTV on our most conservative collateral type, meaning you can borrow $1 for every $4 (in STX) deposited.

Mary | Satoshi Club: But with that come risks. As I understand it, users need to keep track of everything to avoid liquidation? Do you have any system of notifications for users? In case they are close to liquidation?

Pieter: Not really, that is indeed a responsibility of the user.

Mary | Satoshi Club: Gotcha😃 Interesting system and I can’t wait to see how it will work!

Jonah 🏅🎹 | Satoshi Club: Yeah, an excellent one!

Mary | Satoshi Club: Thank you for your answers! Ready to jump to the next question?🚀

Pieter: Absolutely!

Q4 from Telegram user @yellowchamp:

Arkadiko is a protocol with natural incentives, meaning that all stakeholders on the platform receive direct benefits for the service they provide. So, are these natural incentives just for stakeholders of your platform? How about the holders of your token, especially the long-term holder, are there any incentives for them as holders as we know that not anyone is aware or interested in staking? Can you explain more about the natural incentives that your platform offers to stakeholders? How it will be distributed to stakeholders? Thank you.

Pieter: So currently we distribute DIKO tokens to four emissions sinks:

  1. Liquidity Providers of STX/USDA, STX/DIKO, DIKO/USDA
  2. DIKO Stakers in the Security Module

So you can stake DIKO without any impermanent loss and get rewarded for that. This will also give you governance voting power. Note that there are some risks attached to the Security Module, I will find the links to the docs explaining it a bit more.

https://docs.arkadiko.finance/protocol/diko/security-module

The idea behind DIKO is you have to stake it or provide liquidity with it. It is not a token to be passively held in wallets, as you will be missing out on valuable rewards.

Jonah 🏅🎹 | Satoshi Club: So in other words, no rewards for just holding?

Pieter: I would say, staking is quite equivalent to holding.

But for just holding in your wallet, no. You would have to use the Arkadiko Protocol to get rewards.

Jonah 🏅🎹 | Satoshi Club: Oh yeah that’s right!

Mary | Satoshi Club: So, it will be used only on Arkadiko platform, right? Do you have plans to list it on some DEXes or CEXes?

Pieter: We can extend DIKO to other DEXes on Stacks once these pop up.

CEX listings is not something on our mind right now, but possibly in the future. We have started early talks there.

Mary | Satoshi Club: I see, hope Stacks ecosystem will grow fast👍

Thank you for your answers, guys! Ready to proceed?🚀

Philip: Let’s go!

Q5 from Telegram user @Asela1112:

By Arkadiko Finance, a new stablecoin will be introduced called USDA, which is to be pegged to USD coins. However, lots of existing stablecoins are generated newly with time, like USDT, USDC, BUSD, USDM etc. Will the USDA coin be able to trade in other exchanges like BitMart, Bittrex, Binance? As I know, BUSD has some staking programs in Binance exchange. What about the USDA stablecoin in this matter? Can you elaborate on the utilities of USDA and differences with other stablecoins?

Pieter: We are all for spreading our stablecoin to as much places as possible. But let’s be realistic, USDA will most likely be a Stacks ecosystem stablecoin. But you will be able to swap it against some of the other stablecoins you mentioned. Perhaps in a multi-chain future, you will not exactly know which stablecoin you are using as the complexity is abstracted away.

USDA wants to be similar to DAI but on Stacks. It is decentralized, non-custodial and backed by crypto assets.

Jonah 🏅🎹 | Satoshi Club: Still early and possible!

Mary | Satoshi Club: So, you’re planning a multi-chain future?

Pieter: We are constantly looking to improve USDA and integrations with other chains are likely part of that effort. For now, we focus on Stacks but are already exploring opportunities for bridging or bringing other stablecoins to Stacks against which we can peg (create a liquidity pool).

Mary | Satoshi Club: If it were now and purely theoretically, what chain do you see first joining the bridge?

Pieter: Probably something EVM-compatible, just Mainnet Ethereum is probably the best choice. Solana would be a secondary option.

Mary | Satoshi Club: Wow, excellent choice😊

Jonah 🏅🎹 | Satoshi Club: Great possible options.

Mary | Satoshi Club: Thank you for your answers, guys! Ready for the 6th and last question from this part?🔥

Pieter: Yes please go ahead.

Q6 from Telegram user @victorogb:

Reading through your documents, I came across the security model adopted by Arkadiko, which gives DIKO holders the option to stake their DIKO tokens getting stDIKO in return. However, it is stated that staking these tokens in your security model, comes with a risk of losing up to 30% of your DIKO, which is used by the Protocol to cover losses. Can you carefully explain this process and why is this risk factor necessary? Also, why would Arkadiko allow stakers bare the risk with an external hack or exploit, wouldn’t it be better if the Protocol has an internal mechanism or Vault to cover such eventualities?

Pieter: Ah excellent, a question about the security module.

This exact same mechanism is used by Aave, a lending/borrowing platform on Ethereum. There are other workarounds possible as well, but one of the main reasons that prompted us to choose this solution is actually legal instead of technical.

You can not give token rewards to passive stakers of your token. This automatically classifies your token as a security and we were advised by lawyers to not do this. But we wanted staking and rewards. That is why, we introduced this type of insurance, which can not be seen as passive staking as the capital is potentially carrying a risk.

Mary | Satoshi Club: Got it👍 Lawyers always know better!

Pieter: Well yea, the legal angle is certainly important. It is a minor design choice to sacrifice for the benefit of being compliant.

Mary | Satoshi Club: What can you tell us about security on your platform?

Pieter: We have done extensive testing and went through an audit done by Hiro Systems, an important player in the Stacks ecosystem.

Other than that, there can be bugs/exploits that have been missed by all of us. Which is why, I would advise caution in the beginning.

Philip: Audit was done by 0F*.

Mary | Satoshi Club: Understood😃 Anyway, I can say that you take security seriously.

Pieter: Absolutely, the security of user’s deposits is our primary concern!

Mary | Satoshi Club: I wish you no bugs and no exploits😃

Philip: We have gone through countless iterations to make sure that everything is secure indeed 🙂

Mary | Satoshi Club: Super👍

And now we came close to the live part of our AMA, where our members will ask you a few hundreds of questions😃 Ready for it?)

Philip: Ready 🙂

Mary | Satoshi Club: Let’s go🚀

Part 2 — live questions from the Telegram community

Q1 from Telegram user @garapasik:

What is the structure of the Arkadiko project? Is it decentralized or an open source protocol? If so, how should the governance plan be addressed?

Pieter: We want to transition to a DAO, so decentralized and open-source (we are already open source right now).

Q2 from Telegram user @feranno:

$DIKO is Arkadiko’s governance token. So, how much $DIKO do we need to own to join the board?

Philip: Correct! There is no requirement on the amount of tokens that you need. You can participate in governance (voting on proposals, staking in the security module, swapping etc) with as little as 1 DIKO token!

Q3 from Telegram user @cindy_crypto:

As this year is a year for NFTs, what are your thoughts about NFTs and do you plan to create any NFT marketplace for Arkadiko project?

Philip: We love NFTs!

Right now, we are focused on fungible tokens, meaning we allow you to collateralise fungible tokens only (think xBTC, STX, …) and not NFTs, at least for the next few months. We can imagine a future where you will be able to borrow against your NFTs and are already researching how to work with NFTs as collateral. This is one of the features on my personal wish list that excites me the most 🙂

Q4 from Telegram user @munishgmr:

There is also an Arkadiko decentralized exchange, what main features does this platform have?

Philip: The Arkadiko DEX (in other words, the swap) will power all swapping of your favourite tokens. When we started building the Arkadiko stablecoin (USDA), we also needed a way for users to swap back and forth between USDA and other tokens (e.g. USDA<>STX, USDA<>DIKO, STX<>DIKO etc) so we decided to build a simple swap that allows users to trade their favourite tokens with low slippage!

Q5 from Telegram user @esrarengizbtc:

Are you worried about the future due to the increasing competition between crypto projects with the influence of De-Fi and NFT? How will it be possible for you not to be among the projects that will be left unfinished if the number of projects and the market size do not grow in time? Do you have qualities that give you confidence?

Philip: I think to worry is the wrong word but yes, there are loads of De-Fi projects out there! However, our stablecoin USDA is quite specialised in the sense that it earns a yield for you while you use it.

Adding to that, USDA will be used in a ton of Stacks protocols that are native to the Stacks blockchain and we already have identified several teams that are building on top of Arkadiko (i.e. using USDA in some shape or form).

Q6 from Telegram user @Asela1112:

I heard that you are going to launch Arkadiko Finance on 21st of October. Can you give us a sneak peek about this launching? Is it a kind of fair launch?

Philip: Good question. We are launching on the 21st indeed, that is this Thursday!

It is a fair launch where we give away over 50M of the token supply over the next 5 years as an incentive for users to participate in the protocol. In total, the DIKO supply will be 100M, so that is 50% that we give away in emissions (all through the staking pools that Pieter talked about during the AMA).

Q7 from Telegram user @Prashantbgmi:

Security should be the top priority for projects, what have you done in this field? Is there any big bounty program? What are the criteria for joining it?

Philip: There is a bug bounty program. No criteria except for the rules that we list on our Github page, see https://github.com/arkadiko-dao/arkadiko/blob/master/SECURITY.md

Q8 from Telegram user @Korryl:

My opinion is that Arkadiko is quite an unique name for a project, can you kindly explain what is the meaning of Arkadiko? Why did you choose this name for the project?

Philip: I came up with this name because I think the meaning behind it is very important. Arkadiko is a Greek bridge and one of the oldest ever (~5000 years old) that is still in use today. Here’s some more info in a recent blog post of ours:

Arkadiko Finance was named after the Arkadiko bridge, a Mycenaean bridge near the modern road from Tiryns to Epidauros on the Peloponnese in Greece. Dating to the Greek Bronze Age, it is one of the oldest arch bridges still in existence. It serves to reflect the vision and values at Arkadiko Finance where we seek to construct the building blocks to power Decentralized Finance (De-Fi) that can withstand the test of time.

See https://arkadikofinance.medium.com/the-arkadiko-vision-ab2340bf0b2b

Q9 from Telegram user @csgonub:

All of the crypto projects and De-Fi projects are based on English, but there are many people in the world that don’t speak English. Do you have any local communities for them?

Philip: This is so true!

We are setting up localised Discord channels for people who are not comfortable with English. We already have Korean and Japanese channels, and will be setting up more in the coming days and weeks 🙂

Part 3 – Quiz Results

As usual, for the third part, Satoshi Club Team asked the chat 4 questions about the crypto project. A link to a Quiz form was sent into the chat.

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