ArkadikoPrice

(DIKO)

DIKO is the native governance and utility token of the Arkadiko protocol. It is used for participating in DAO governance, staking for rewards, and acting as a security backstop for the ecosystem. In contrast, USDA is a decentralized, over-collateralized stablecoin minted by the protocol. While DIKO powers the protocol's management, USDA is intended to maintain a soft peg to the U.S. Dollar and is backed by assets like STX and sBTC, serving as a medium of exchange.

Self-repaying loans leverage the Stacking mechanism of the Stacks blockchain. When a user locks STX in a vault to mint USDA, the protocol stacks that STX to earn Bitcoin rewards. Instead of delivering these rewards to the user, Arkadiko automatically converts the Bitcoin into USDA and applies it toward the user's outstanding debt. This allows the loan balance to decrease over time without the user needing to make manual repayments, effectively using the collateral's yield to pay off the debt.

Liquidation occurs when a vault's collateral value drops below a specific threshold (e.g., 150%), leading to the collateral being sold at a discount to cover the debt, usually involving a penalty fee. Redemption is a peg-maintenance tool where anyone can exchange USDA for $1 worth of collateral from the vaults with the lowest collateral ratios. Redemptions involve no penalty fee, but they force-repay the user's debt by using their collateral, which ends the user's exposure to that asset.

Users can put their DIKO to work through staking or liquidity provision. By staking DIKO in the Security Module, users receive stDIKO, which provides governance power and a share of protocol incentives. Alternatively, users can provide liquidity by pairing DIKO with assets like USDA or STX on Arkadiko Swap or supported exchanges like LBank. This allows users to earn trading fees and protocol emissions for facilitating decentralized trading within the ecosystem.

Arkadiko has undergone audits by 0F, a specialist in Clarity and Stacks smart contracts. To improve safety following early version exploits, the protocol transitioned to Arkadiko 2.0. This upgrade introduced enhanced security modules and refined architecture to protect user assets. While the team has implemented these rigorous security measures, the protocol acknowledges that all DeFi platforms carry inherent smart contract risks, and they continue to prioritize security through code improvements and community governance.

The integration of sBTC allows users to use programmable Bitcoin as collateral to mint USDA. This is a significant development for Bitcoin DeFi, as it enables users to unlock liquidity from their Bitcoin holdings without leaving the Bitcoin ecosystem. By using sBTC in Arkadiko 2.0, holders can participate in decentralized lending and stablecoin minting while maintaining exposure to Bitcoin, benefited by the faster transaction speeds introduced by recent Stacks network upgrades.