Introducing Arcana - a protocol built on re.al that makes complex, institutional-grade delta-neutral yield strategies accessible to any DeFi user. These types of trades have allowed experienced traders and institutional investors to capitalize on the appreciation and high yields of crypto assets while mitigating its market volatility risks.

Traditionally hidden behind the secretive veil of sophisticated financial institutions, Arcana makes these yield strategies available to DeFi in a single, simple token.

The yield captured from the delta-neutral strategies is tokenized and distributed through arcUSD, an ERC-20 rebasing token soft-pegged to the dollar. arcUSD can be deployed across multiple DeFi applications and ecosystems, unlocking additional yield composability and further enhancing yield opportunities for its holders.

Unveiling Arcana’s Delta-neutral Yield Strategies

Arcana employs multiple delta-neutral strategies, carefully designed to leverage unique opportunities within crypto markets while minimizing risk:

• Cash and Carry Trade: This strategy involves buying a token like BTC or ETH in the spot market (going long) while simultaneously selling corresponding perpetual futures contracts (going short), achieving a delta-neutral position. By exploiting the price discrepancies between spot and futures markets, Arcana collects yield from the perpetual funding rate.

• Liquidity Pool Hedging: Building on the principles of the Cash and Carry trade, this strategy utilizes a portion of assets to participate in large, established DeFi liquidity pools to collect LP fees and rewards. The other portion is used as margin to short the assets in these liquidity pools, resulting in a delta-neutral position.

Initially, Arcana will focus on the Cash and Carry trade with Bitcoin. The Liquidity Pool Hedging strategy will be implemented shortly after launch. Other strategies are under study and may be added to Arcana's repertoire in the future.

To learn more about the details of each active strategy, unveil the mysteries visiting the Arcana Docs.

Revealing arcUSD

Arcana distributes yield generated from its delta-neutral strategies through arcUSD, a rebasing token soft-pegged to the dollar. Yield is distributed to arcUSD holders in the form of daily rebases, which automatically increase their balance each period.

No staking or locking mechanism involved.

Since arcUSD is a LayerZero Omnichain Fungible Token (OFT), it can be deployed in DeFi applications, rebasing across multiple chains to unlock additional yield opportunities.

Users can easily acquire arcUSD on secondary markets like Pearl DEX. Additionally, KYC-verified users have the option to mint and redeem arcUSD directly through the Arcana protocol.

Arcana has also instituted an Insurance Fund, which accumulates 5% of the yield generated from the delta-neutral strategies. The primary objective of this fund is to provide a safety net for the protocol during extended periods of negative funding rates or in the event of any other black swan situation that could potentially destabilize operations or impact the value of arcUSD.

Note that while arcUSD is soft-pegged to the dollar to facilitate user experience and unlock seamless DeFi composability, this is not a stablecoin. Arcana can’t be compared to products such as USDT and USDC, since it introduces new and different risks, which are not proper of the stablecoin category.

The Arcana Liquidity Flywheel

Arcana introduces the Liquidity Flywheel to enhance liquidity across ve(3,3) DEXs. When arcUSD is deployed in a liquidity pool, paired with any other token, the yield generated is redirected as liquidity incentives to increase rewards (emissions) for providing liquidity to the pool.

This innovative approach benefits both arcUSD holders and the Arcana protocol:

• Greater Yield: arcUSD holders receive a greater yield through LP rewards compared to arcUSD rebases alone.

• Liquidity Growth: Integrated liquidity incentives continuously attract more liquidity providers, kickstarting the flywheel. As the amount of arcUSD in the pool grows, so do the liquidity incentives.

• Liquidity-as-a-Service (LaaS): This strategy allows any protocol to pair their token with arcUSD to collect free liquidity incentives that scale with the size of the pool.

Arcana Points Program

To bootstrap liquidity and incentivize early users, Arcana is launching with a points program that rewards ecosystem participants during this growth phase. Points program earnings can be easily tracked in the Arcana UI, and these points will convert into a stake in future protocol governance.

Users earn points based on their activity and their TVL within the Arcana protocol. arcUSD holders automatically accrue daily base rewards with a 1x multiplier on their holdings.

Additionally, users have the option to deposit arcUSD into the PTa vault, opting to forgo native arcUSD yield in exchange for a 10x multiplier in daily points rewards.

Users earning Arcana points are also eligible for the re.al RWA Rewards Program. Arcana TVL and assets used within the re.al ecosystem can entitle users to multipliers on their RWA rewards earnings. Users simply need to join this program to start earning additional rewards from their arcUSD and PTa holdings.

As Arcana is integrated within Stack, both arcUSD and PTa are approved collaterals in the borrow and leverage features. Users can borrow against arcUSD just like any other collateral. In some cases, the native yield of arcUSD may outweigh borrowing fees, creating a free, self-repaying loan. PTa can also be deposited as collateral and borrowed against, creating an opportunity to farm Arcana points with lower capital commitments. Taking things a step further, PTa tokens can be leveraged on Stack, adding a leverage factor onto the native PTa points multiplier.

ARCANA tokens will accrue 5% of the protocol's yield to stakers, providing an immediate and tangible benefit for participating in the ecosystem. ARCANA tokens will also grant users a stake in the protocol's governance, allowing holders to vote on important decisions and shape the future of Arcana.