Arkadiko is a decentralized, non-custodial liquidity protocol where users can collateralize their assets and mint a stablecoin called USDA. This enables depositors to gain increased liquidity in the form of a soft-pegged US Dollar stablecoin, while maintaining original asset exposure.
Utilising yield from PoX (Proof of Transfer), a STX-collateralized Vault that mints USDA creates a self-paying loan. Similar to MakerDAO, Arkadiko increases the capital efficiency of the STX asset by enabling it to be used in a collateralized debt position.
Next to the stablecoin, Arkadiko allows users to swap tokens in a trustless and permissionless manner. Users can deposit liquidity in tokens or add their own pairs to enable trading on tokens they have created themselves.
The ability of the Stacks blockchain to read native Bitcoin state makes it uniquely positioned to host DeFi on top of Bitcoin. Furthermore, the chain itself is secured by Bitcoin hashpower which is currently the most secure and infallible security mechanism in the world.
While a current custodial tokenized version of BTC exists on Stacks, first federated and eventually completely decentralized representation are in the works. The potential to use Bitcoin as a collateral asset in Clarity smart contracts on Stacks could position Arkadiko as key infrastructure in the layered future of Bitcoin.