Participants

The Arche Protocol features three user categories: borrowers, depositors, liquidators, and ARCHE liquidity providers. Additionally, the protocol relies on oracle feeders, which play a vital role in maintaining the required infrastructure.

Depositors in the Arche Protocol are encouraged to deposit MSD into Arche's Savings Account. They earn interest paid by borrowers, supplemented by a portion of the revenue generated through rewards from staked MOVE collaterals. To ensure the MSD price stability, the protocol incentivizes liquidators to monitor and act on loans at risk of undercollateralization, preventing borrowers from incurring liabilities beyond the value of their collateral.

Borrower

Borrowers are participants who establish collateralized loan positions to borrow MSD from the Arche Protocol. Eligible assets whitelisted by Arche Protocol can be deposited and locked as collateral to create a loan. Borrowers must maintain a loan-to-value (LTV) ratio below the designated maximum threshold.

By borrowing, users can access liquidity while retaining price exposure to their collateral assets. However, borrowers are advised to monitor their LTV ratios closely, as exceeding the maximum threshold can result in liquidation.

To incentivize borrowing, Arche Protocol distributes ARCHE tokens to borrowers. Additional information about borrower ARCHE distribution will be available soon.

Depositor (Lender)

A Depositor is a participant who deposits MSD into the Arche's Savings Account. The deposited MSD may be allocated to the Liquidation Contract bot, supporting the Price Stability Mechanism. Depositors earn pro-rata accrued interest, derived from the interest paid by borrowers and staking rewards.

In the future, depositors will receive a liquid token in exchange for their deposit. This token represents their share in the MSD pool and can be redeemed later to claim the original MSD deposit, along with accrued interest and any depositor subsdies.

Liquidator

A Liquidator is responsible for identifying risky loans—those with an LTV ratio exceeding the established limit—and initiating collateral liquidation when needed. The Liquidator acquires the liquidated collateral by exchanging it for their MSD.

Upon execution, the Liquidator obtains the collateral tokens at a discounted price, while the MSD used in their bid is applied to repay the borrower's outstanding loan.

ARCHE Liquidity Provider

ARCHE Liquidity Providers supply liquidity to the ARCHE-MSD pair, playing a key role in establishing the exchange's initial liquidity between ARCHE tokens and MSD.

Oracle Feeder

An Oracle Feeder serves as a data provider, delivering accurate and timely price feeds for collateral assets. This price data is crucial for determining a borrower's collateral value and is also utilized as the reference price within the Liquidation Contract.

Initially, Arche relies on the Pyth Network as its oracle feeder. However, as the protocol evolves, governance mechanisms may enable the integration of third-party oracle feeders to expand support.