Arcadia May Recap

Arcadia Finance
3 min readJun 23, 2023

Welcome to Arcadia’s May recap. In this recap, we’ll be going over the key highlights for Arcadia over the past month. May was a month of continued progress, learnings and growth.

TDLR;

  • Launched leveraged yield strategies product.
  • Started the final audit for our Uniswap V3 pricing module.
  • Joined the Optimistic podcast to talk about what makes Arcadia special.

Metrics

Despite the continued downturn in markets, the protocol experienced steady growth in user and liquidity metrics in May.

Liquidity metrics — Total deposits grew to $2.47M, representing an increase of 24% while total borrows rose 33% to reach $426,500 in May.

User metrics — In may the protocol had 742 active accounts, a 7% increase. Most importantly, with the introduction of leveraged strategies this past month, we saw a sharp increase in user activity as measured by the number of in-app leveraged transactions performed by users which jumped 32% compared to the previous month. Lastly, the number of borrowers and liquidity providers continued to grow steadily by 34% and 3.6% respectively.

Highlights

Leveraged yield strategies

Until now, the Arcadia front-end was built around a single use case — spot margin trading. The Arcadia smart contracts, however, can do much more. In may, we added a new use case to our front-end: leveraged yield strategies.

Leveraged yield strategies allow users to borrow up to 10x their collateral and perform multiple complex actions across other protocols with one click in one single transaction. The first assets we provided support for were the liquid staking tokens — cbETH, wstETH and rETH. Through leveraged yield strategies in Arcadia a user can, for example, borrow 8x their collateral to leverage the spread between ETH staking yields and Arcadia’s interest rates while remaining delta-neutral.

Users are earning 23.7% APY on cbETH and 21.2% APY on rETH with almost no liquidation risk.

We will continue to add new leveraged yield strategies over the coming weeks.

Uniswap V3 LP Tokens

Over the past month we’ve been working on our Uniswap V3 pricing module to allow v3 LP tokens as collateral in the protocol. This new collateral inclusion brings an almost limitless number of opportunities for users. Some examples:

  • A user could combine a short volatility collateral position with a long volatility collateral position in the same margin account, where the risk in one position can be partially or entirely offset by the other. This means traders can potentially reduce their margin requirements, increase their buying power, and add more flexibility to their trading strategies while reducing their overall collateral volatility.
  • A user can borrow against their Uniswap V3 LP tokens without having to close the underlying position first. Most importantly, you would still be able to actively manage that position even if debt is issued against it without having to close it.
  • A user would be able to provide liquidity in Uniswap V3 with up to 10x leverage in a single transaction via Arcadia’s leveraged yield strategies.

We will be sharing more on this soon.

What’s next?

Over the next weeks, besides the introduction of Uniswap v3 as collateral in the protocol, we will be launching a new landing page and a completely revamped dApp. Our focus continues to be on building the most secure and advanced platform for DeFi users.

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Stay up to date with our latest updates and developments on twitter, discord, and github.

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