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Aark Digital AMA
Recorded: June 2, 2023 Duration: 0:35:00Space Recording
Full Transcription
Hey guys, thanks everybody for jumping in. I'm really surprised we got so many people at the awesome. We're stoked everybody here so I really really think this will be a good time to let everybody know what we went up to for the past few months and hopefully answer some of the questions that I'll
to give a brief overview of the hosts and I guess who will be speaking. So it will be myself, Damien and Eden. They should be jumping up and just suck. And then to basically give a
a brief background on who our is and what we are doing. We are basically a team that is traitors at hearts. We have been trading on D5 for the last 2-3 years. Basically doing everything you can think of, probably what a lot of you guys are doing as well. And then what happened is in the last year
So we rise that there's actually some issues with defy like a lot of the experience especially in the perps tech area was not great We really wanted to approve on it and so in order to do that we basically Got things going and now we're here. We basically built
that we think is pretty unique and do a lot of cool stuff and we'll be doing a lot more cool stuff in the future. So really excited to be sharing with you guys what we've been up to. Let me make sure that we get the other two guys in here and then we'll get things going.
I think the other guys are my technically just like two minutes guys start with the delay
Okay, I think we should be getting on this show. I think we have a fix guys. Give us two seconds on that.
Okay, there we go. Looks like we're getting them in. Sick. Sick.
Okay, cool. We'll dive into it. So give a brief intro on myself. I've just been with the team for quite a bit working on a lot of the BD stuff. And then Damian is one of our geniuses that we have out here building all the tech. So we're trying to answer a lot of the questions you guys gave us today. Like I said, help you.
you guys a better background of what we've been up to and then what we'll be doing in the future. We think the AML take between 20-30 minutes. So hopefully you guys have a warm cup of coffee or some tea. You have a good time. To give a brief overview of what we are, like I said we're a Perp Dex. We're a Perp Dex that focuses on professional
traders and traders who really know what they're doing. Obviously, we're not going to talk shit too much on our competitive competition, but we think that there needs to be a solution that provides a realistic environment where sophisticated traders who are using both API and other strategies can come in and have a great experience.
think similar to what they're getting on an exchange like finance. Okay, so I think we built that. So what we're going to do now is we're basically going to dive in to go to some questions for the Google from the you guys are going us through Google and then the end will go through the Q&A for live listeners.
If you guys want, there's a comment section here. You can obviously leave questions there and we'll try to get to them at the end. I don't know if they ever answer every question you guys have, but it's all good. If you guys have any other questions, jump in the Discord after. We're there all the time, so please feel free to ping us whenever you guys want. And it should be pretty good. Okay, let's get into#
So we're going to start with the business stuff. We're going to look at a few questions we've had regarding our go-to market. So let me get this pulled up. So it looks like someone has asked if we're going to go multi-chain on the
I guess initially so we're not playing on going multi-chain initially. In the short term to midterm we're going to be focused on really building on our product and making sure it works on our butrium. We do believe the multi-chain is important. There'll be a lot of value there though. So we think it's a good question. As time goes on and as things in the market
change you never know where liquidity will be. So we are already talking to a few partners to build out some potential multi-teen opportunities and make sure that happens and we're ready to make it happen when the time arrives. But that's not on our roadmap in the short to midterm. Okay.
So the next thing, let's dive into the features. Damien, I guess this will be more for you. Do you want to go ahead and dive into some of the questions that we have around features? >> Yep, sure. Hello guys, I'm Damien. I'm the smart contract developer and the designer of the model. So I got a few question about
the features. The first one is from CrowneyW. He asked how many trading pairs will there be. So my answer is, so we can list over 30 trading pairs due to our new AIMM model. We call it Perino Mark and Maker, like Intuore PMM. So what we do with this model is we
We reflect the depth of the CX order books and create a similar level of price impact per volume at art. So our module eliminates the possibility of a risk-free price manipulation attack and allowing us to list more trading pairs than any other zero-slipage protocol does.
So while also like supporting the same level of the depth as CX. And the second question was from coin mother and will there be swaps in the future? Answer is if you're asking whether we would support in swapping your collapse
for another, the answer is yes. So we will allow users to trade their colladrals on external spot markets like YenSwap 3.3 or 1 inch while still holding their positions. And the last question about the feature was
This one will there be a mobile version from proxy to zero and not a four nine. And thanks for thanks for the question. The team is really pro prioritizing this feature. The mobile version and mobile apps are planned to be launched in the third quarter of the year. So stay tuned.
Yep, and the next section is about the security. This is really important question, great question. Are there pre cautionary measures to face any emergency problems or a sudden fall in the end of market? These procedures serve as a protective shield of investors so they
It can be reshared with ease from Mr. Weld. Requestion. So if the liquider fails to liquidate a position or collateral at the proper price, the account value may become negative. So resulting in a bad depth, that user cannot afford.
In this case, the entrance fund will take over the bad debt on behalf of the user. Then the next question would probably be who will be the source of the entrance fund? And the answer to this question is anyone. So anyone can deposit their funds into the entrance pool and receive a portal
of the equation bonus at every single liquidation event as a reward as a reward. Yep, so that was the question question that I'll handle. And it's here. Yep, thanks man. Local stuff, obviously we think so
security is super important and so we're taking a high priority on obviously taking care of liquidations and other events but also just making sure everything's tightened up. That's why we had an audit with Hackin, we're looking to others and we're really pushing on that because we understand how important it is. So next we have a few kind of I guess fun interesting questions that Ethan's going to take care of. Do you want to dive into that, man?
Maybe he can't hear us. Let's double check. Are you reading?
Sorry, yeah, I'm here. Could you repeat the question please? Yeah, so we have some fun questions. This is from KB-06. Why did the team name the project art digital? Oh, okay. Yep. So the arc is actually
art that we commonly know. It's from the Noah's Ark from the Bible. I'm not a Christian but I'm just aware of the story. And why we use this knowledge was because we've been systematic creators and as well as defy on-chain fund for the past
We are one of the biggest in Asia and then what happened is because we were only using on-chain venues and perp dexes and all the other DeFi protocols. We of course came to realize that DeFi is in some sense broken.
So we really had took some time like thinking about whether this could be fixed in the short term while we engage in this industry. And the answer was yes. And the part that we wanted to fix the most was the perfect industry. And we just thought that all of these guys are going to go through a big, great
flood and they're going to be flushed out and if there's one surviving that's going to be the ones on the arc. So all our users, all our community members, all our team, we're just looking into the long-term and seeing how we can make a venue that people can actually use
Not just this week or this year, but five years later, like what can we ensure for the people and for the industry for us to like really make a difference, right? So that's when we came with Arc and because it's digital assets comes digital, so hence Arc digital.
So, yep, no, we think I love the name and it's going to be super fun to see, I guess, how we, how well we do it living up to it. I'm pretty, pretty bullish on it. And then we had a similar question from USL 14501 that what does our community got answered. Cool. That's awesome, guys. Is there anything else you wanted to add, even on
that I missed on, I guess, who our giz and I guess what we're doing on the intro drum. Is there anything else? Other than I could go over the general intro of the Perk Decks, but I think for the questions, that's all I have. For sure, yeah, if you want to dive into the general intro, we'll go from there. Yeah, sure.
So like we mentioned we were on Define Onchains Fund. We did everything in our trading, market making, arbitrage, so anything you can think about, especially in the Onchains space. Sandwiches, MIVs, arbitrage between spots, cross-chain arbitrage and everything like that. And what we came to realize is that
If you're a trader, if you're trading on any exchange, there's just three things that you have to remember for your trading experience. That's a liquidity spread and uptime. Those are the three things that all traders things are more important. If you go to any institution, TREDFI, DFI, CryptoFone, HedgeFone, anything, the three things that they would
But, say, the most important is liquidity, spread, and uptime. So, this was usually solved in larger centralized exchanges by NNZO, KX, Coinbase. They all have liquidity. They all brought on market makers to fix the spread. They tried to make the uptime higher than 99%.
And because the on-chain space was not able to solve some of this before, Perp Dex's were the last to come in, but because the DYDX made the first move to fix the spread and uptime, we think that's why they successfully gained this attention. So what happened is the DYDX
did what centralized exchanges do as well. They brought a lot of market makers. So their backers are a lot of hedge funds, a lot of traders, a lot of funds. And because they are on the blockchain, their uptime is above 99%. But the problem is, still they're relying on market makers. So the liquidity is still small.
So their spread is less than the centralized exchanges and for the uptime because the widex is centralized and so is starkex They don't have a hundred percent uptime And then came gmx so these guys solved a lot of problems that the widex also had so the first thing was
they solved the spread issue because they had zero impact all the liquidity is basically focused and concentrated in the current price and the uptime is basically a hundred percent because we haven't seen arbitrum going to a big crash just yet. So these are these two issues but these
still had an issue with liquidity. The problem that GMX had was first, their open interest was capped by their LP pool size. Second, because their liquidity was focused on the execution price and zero impact, they
We couldn't include the long tail assets for trading. So this is where we came in. The liquidity spread and uptime. We solved all these three issues that are crucial for any trader to come in. So uptime for us is also 100%. We solved the spread issue through a mechanism we call
PMM. So it's basically a derivative of an AMM which is an automating market maker and we call ours a parallel market maker. So what we do is usually Dex's bring the current price from the central axis changes through the Oracle but we bring one more thing
through the Oracle, which is the liquidity debt is what we call it. So what happens is, let's say we have a theory and pair tradable on our digital. Through the Oracle, we would retrieve how much liquidity Binance has and its Ethereum pair. So usually if you
you buy 20 million dollars worth of Ethereum on Binance, you have a 1% price impact. And for us, we have the exact same price impact. If you buy 20 million dollars on our exchange, you will have a 1% price impact. And if you up to a 20 million dollar trade,
it would be more beneficial to trade on arc than GMX because GMX is not totally zero impact and because we have liquidity sufficient as Binance up to a $20 million trade we are more liquid than GMX or any other exchange. We're basically the most liquid exchange on
the planet, same as binets. Among any centralized exchange and on your other decks where the most liquid because we're getting retrieving this liquidity from the most liquid exchange. So what this can also do is it just it doesn't just make it liquid, we can support a longer tail of
assets. So what this means is if let's say Binance has about 500 pairs, then we can retrieve the liquidity depth from all those 500 pairs. So if they have like Pepe, if they have any minor assets that you can't find on other centralized exchanges,
You can always come to ARC and find this pair and you will have the quality sufficient enough as Binance to take on our exchange. So this is also solving a lot of issues that JimX version 2 has because JimX version 2 decided to spread its the quality among each pair. So it's basically
basically giving up the initial advantage that it had by a single pool counterparting all the markets, while now each pool will counterparty only one market. So they're going back to like a centralized exchange form where they had issues with the quality fragmentation. But for us, because we do
this in one pool, all the pools will have sufficient liquidity as long as the most liquid exchange. So that's one biggest upside of arc. So if you want to trade some pair and if it's on any centralized exchange, you can
on our exchange as well. So that really brings the scalability of the number of markets and what we also do is we can scale the open interest 16 times that of GMX and almost 30 to 50 times compared to Gains Network. So this is possible because
because it's actually really simple. Because all positions on GMX is basically borrowing from the pool. If the pool size is $100, the open interest is capped to $100. But in our case, what happens is the traders are not borrowing from the pool. The traders are borrowing from
each other. So the longs are counter-party by the short and the shorts are counter-party by long. So if you actually open interest, let's say you have a long position on our exchange, the pull is actually not on a short position. There will come another player who will take a short position because they
are incentivized to do this because of the funding fees. And because GMX doesn't have this funding fee structure, their positions are usually skewed. So if you go to GMX right now, you're going to see 80% long and 20% short. And because the market has been on the bull run for the past four months, they've lost 15% of their TVL.
So the pool guys in the pool are basically in a loss and the skew is making things worse for the pool stability. But for us, because the lungs ensure counterparty each other and the pool doesn't counterparty the traits and only takes the fees, they are exposed to much less volatility.
So in this sense, because the counterparty much less are open interest is more scalable. And this really comes to our last feature that is one of the most important. It's called a leverage LP. So users in GMX are probably going to see about 5% APR right now.
If you have been using our exchange, you can leverage your LP position. So it's basically like a per position on Binance. If you open up a per position on Binance, you're not really borrowing from anybody like a margin trade. You basically have a synthetic leverage.
And you're not paying any fees, you're not paying interest, you're not paying anything. So that's the case for us too. You're not borrowing from anybody so you don't have to take care or consider the interest rate. But you're still getting that leverage. So let's say you're aeth lover, you put an eeth and you have
you make a 5x leverage. When others with 1x leverage or no leverage have 5% APR, if you come to us you're going to have 25%. Of course you're going to have to control your positions because this position is also going to get liquidated with the same rules that Binance
has and our liquidation threshold is managed by thresholds of ABI. So, but in another case, if let's say you just want to hold stablecoins, theoretically you will not get liquidated even if you do a 5x leverage and the market drops 20% or so
So that's the real upside. So this whole thing is a package. So if you want leverage, you have the pool has to be more safer, the pool has to counter party less risk for the traders and LPs, which is what happens. So the pool is much safer and the traders are
are much more scalable. So what's going on is on both sides you have your exposed much less width but you're more scalable. So in a nutshell that's the introduction for us. We think that because there's a lot of players that haven't come into the market yet and that
are getting ready to come into them because there's of course a lot of opportunity in the DeFi space. We want not just like mass adoption but the first step we think is always crypto funds, traders and systematic funds. So that's what happens in 2018. A lot of hedge funds came
Retail were still skeptic until 2020 when the DeFi summer came, but we also see a lot of we're talking to a lot of funds we were of one before That's why we see this movement coming a lot of funds wanted to come into the perfect market. They just confused. There's a lot of features some tell you you
You have to take a token, some say, "Oh, you have to do this. You're going to take a few days coming to bridge." And it's just complicated for them. But we're making this really easy. We're giving them a centralized exchange experience. They don't have to know any special algorithm or function that's going to make things complicated.
So it's going to be a much lesser hurdle for them to come in. So once we capture this market, we think that we're going to prevail. We have much more success in prevailing as a sustainable, scalable exchange in the long term and the mid-long term.
Awesome, thank you for that. Yep, we're super stoked. Super cool, this is the "Lvicle's Upper" building. We hope you guys are excited as we are to kind of get things rolling. Obviously, we are excited to launch. We can't tell exactly what it will be, but it's going to be sooner than I think a lot of people think.
We're super excited for this. So I'm going to dive into a few questions we got from some users now. So let me get those pulled up and we'll go from there. Hey, Eden, do you want to meet real quick? Sorry, could you read the question please?
I said do you want to I can hear your background or some background noise that was coming up. Okay, let me get those questions pulled up. Okay, cool. So we got a question from I'm going to butcher this. It's
is a caria and they're asking if there will be a partnership with layers 0. I guess I can cover that one. So I think for the partnerships, we're exploring partnerships with a lot of teams. We can't comment on a lot of these yet because obviously there's a lot of details and legal
stuff and silly stuff sometimes. But there's a lot of teams that we are talking to that you guys know pretty well. And so, and where I said we are looking at layers, like going on other chains and cross-chain, I think you guys can make some assumptions there. For the next question, it's from Killroyd. He asked,
are you guys going to be developing some kind of reward system for trading or VIP level system? Yeah, that's pretty standard in the industry. We are working on stuff like that. So we definitely want to reward the traders who are on our platform and who are helping us grow. And then the VIP level, I don't know exactly referring to there, but there is going
to be advantageous to just like you have on Binance. Either you do more volume potentially or you're doing things with help like staking tokens, they'll be cool stuff around that. So if you guys actually look into the docs you might be able to find a few gems that will help you understand how that works. So we'll leave you
to find those easter eggs. And then killroid also asks how many assets will you plan to add? I think Damien already covered this a bit. We can do up to 30, potentially even more at some point, but we're not going to start with that many. We're pretty ambitious, but we're not going to
be ambitious to the point where things break because we want everyone to have a safe training experience. So when we start, we're going to start with some of the majors and then a few of the mid-tier majors and then go from there. We're excited to start sharing some of the details of what those assets will be and when they'll get listed and when we'll launch in the next coming weeks. But yeah, we think we're pretty solid there.
So, okay, I think that's it. I don't know if there's any other live questions that you guys wanted to pull up, but yeah. So I guess the things that we just want to say is we're going to be announcing some of our hackers here pretty quick. So make sure that you guys are following our Instagram or not Instagram. Sorry, our following are
Twitter are in the Discord and paying attention to those things because announcements will come out soon. It's going to be pretty cool. I'm actually super excited to share a few of them. And also in terms of partnerships, so obviously you guys have access to questions around there to some specific partners as well. Pay attention. Those will be announced here pretty shortly.
because we're getting things like this is the start, this is where the ball is going to really start rolling so you guys will see some very, very cool stuff coming out. And then in terms of our traders of the galaxy, which is basically going to be our event to get things moving. If you guys want to pay attention, there's actually going to be a lot of details coming out on the
benefits of that and how you guys can eventually earn some tokens and some rewards through trading. And then like we mentioned, I mentioned earlier in Damien talked about it as well, for us, security is like a number one thing. No matter how good the design is, if the protocol gets hacked, it doesn't work for you guys and it doesn't work for us. So even though we did one on it, we're actually getting ready to do a
second one. So once that audit is completed, hopefully the next, again, I can't even exact date, but the next few, let's say, let's say a little over a month, we'll announce it and we just want to, I guess share with you guys how serious we are about not only making sure that you guys have an excellent experience as traders, but that your guys assets are safe because
That's the most important thing for everybody. There's nothing else. I think that was it. But thanks everybody for jumping on. We got over 2,000 people, which is nuts. It just shows, I guess, how excited not only we are, but you guys are. We really, really appreciate you as a community coming in and doing this for us.
and being a part of, I guess, growing together. And hopefully, once we're all in the arc, we'll all be safe and have a lot of good times together. Here's a community in here as traders. So if there's any other questions you guys have, please feel free to leave them a discord. We love to hang out there. Maybe we'll do a discord, like a,
a little Discord AMA at some point to help answer some of those questions as well. And then we're super excited to see what happens in the next few weeks with not only us, but you guys, so keep us updated and shout out to us out there. Thanks guys, really, really good to get in touch.
