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Welcome to Archi Finance
Composable leveraged yield farming protocol
What is Archi Finance
Archi Finance is composable leveraged yield farming protocol. It has two sides to it: passive liquidity providers who earn low-risk interests by supplying single-asset liquidity; and degen farmers who borrow those assets to achieve a higher APY. GMX will be the platform Archi integrated in v1.
How it works
Overview of Archi Finance
Archi Finance has two sides to it:
Passive liquidity providers - lenders who seek passive yield and prefer lower risks. This can be seen similar to providing liquidity to Compound. Anyone can be a liquidity provider on Archi Finance.
Degen farmers - borrowers who wish to increase their position by borrowing liquidity from the protocol at multiples of their collateral. The liquidity they borrow can be 10x of what their notional size is.
The positions taken by degenerate farmers can be liquidated by anyone before the liquidity providers' assets are exposed to the downside. If everything functions correctly and liquidators do their job, the protocol will return the liquidity providers' assets to the pools.
The liquidations are based on the health factor.
Passive Liquidity Providers
Supply single-asset liquidity and earn low-risk APY
You can start earning APYs by supplying single-assets on Archi which is as simple as lending on Compound and Aave. Besides, all the pools are isolated.
Single Asset pools available in Archi Finance
The assets you supply to the protocol can be utilized, or borrowed for leverage, by degen farmers who actively rebalance their positions or use other strategies. As borrowers, they will be required to pay interest, which accrues to the underlying pools of those assets, as per the protocol's requirements.
The positions taken by degen farmers can be liquidated by anyone before the assets of liquidity providers are exposed to the downside. This enables the protocol to return liquidity providers' assets to the pools, allowing Archi to provide composable leverage.
However, earning on Archi involves certain risks, especially regarding liquidators performing their job correctly. These risks are also general across DeFi. Nonetheless, the Archi Finance team has developed a liquidation bot that anyone can run.
How to calculate APR?
Capital is required for degen farmers to obtain leverage for their financial operations. To facilitate this, there are Liquidity Pools where anyone can become a liquidity provider by supplying assets to the pool. The profits earned from being a liquidity provider depend on the pool usage rate U and the interest share.
The interest share is the percentage of profits that the supplier obtains from the profits streamed from GMX. For example, a 50% interest share means that 50% of the interests generated from borrowed liquidity that are deposited into GMX will be awarded to suppliers. The interest share can be varied and decided by Archi DAO.
Degen Farmers
Up to 10x Leverage Yield Farming in GMX
Whitelisted investors are able to open a leverage position in Archi Finance. To protect the collateral assets, a delta-hedged strategy will be implemented in Archi v1.
Due to the nature of GLP, investors always face the risk of losing their native tokens when prices fluctuate. Archi Finance allows users to borrow funds in a delta-hedged way, which helps prevent such situations while also earning ETH rewards on GMX.
Leverage in Archi Finance
Delta hedging is a strategy used to reduce or eliminate the risk associated with the price movements of the underlying asset. The basic idea behind
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