Tokenomics

The yield collected by the Arcana protocol through the various delta-hedged strategies is distributed as follows:

• 90% to arcUSD holders, distributed via daily rebases

• 5% to the Insurance Fund

• 5% to veRWA holders (since Arcana is natively deployed on re.al)

After the ARCANA TGE, these distributions will reconfigure to account for ARCANA token stakers accruing 5% of the yield earned by the protocol.

arcUSD

arcUSD is an ERC-20 rebasing token, soft-pegged to the dollar. arcUSD collects the yield that Arcana earns through the tokenized delta-neutral strategies, and distributes it to arcUSD holders in the form of daily rebases, increasing their wallet balance each period.

For each arcUSD in circulation, Arcana has ~$1 of backing assets delegated as margin with a derivatives centralized exchange to short 1 TOKENUSD perpetual, in order to keep arcUSD value in USD constant regardless of changes in the spot price of the backing assets.

arcUSD can be used on DeFi applications that support rebase tokens on any chain where it’s currently deployed.

PTa

PTa is an ERC-20 representing a staked version of arcUSD. Users may stake their arcUSD for PTa to earn multiplier on ARCANA points accruals through the Arcana Points Program.

PTa does not accrue any native yield, however it can be borrowed against and leveraged on Stack, just like arcUSD as they share the same backing. Leveraged PTa would further multiply the native points multiplier where leveraged arcUSD would multiply the yield.

Learn more about the interplay of arcUSD and PTa benefits.

PTa and arcUSD will always be staked or unstaked for each other 1:1.

ARCANA

ARCANA is the governance token of the Arcana protocol. ARCANA will be used to decentralize governance and redistribute protocol revenue.

Currently, users can earn points that will entitle them to a share of the ARCANA airdrop by holding arcUSD and using it across DeFi applications.

After the ARCANA TGE, ARCANA token stakers will accrue 5% of the yield earned by the protocol.

Insurance Fund

The Arcana Insurance Fund is an integral part of the protocol’s risk management strategy employed to mitigate potential financial risks arising from adverse market conditions or unforeseen events.

The Insurance Fund accumulates capital by collecting 5% of the yield generated from the delta-neutral yield strategies executed by the Arcana protocol.

The primary objective of the Insurance Fund is to provide a financial 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 the protocol's operations or substantially impact the value of arcUSD.