Arkis
Summary
Arkis is a leveraged trading protocol designed to allow trading across several DeFi platforms. Lenders provide liquidity to the Arkis liquidity pools, which are used to fund leveraged positions. To incentivize repayment, borrowers never receive borrowed funds directly. Instead, loans are provided to _Margin Accounts_. Margin Accounts are individualized smart contracts that hold the borrowers collateral in escrow, whilst providing them an interface to trade the borrowed funds with Arkis's supported protocols. All positions are held by the Margin Account until the borrower closes their position or the Margin Account is liquidated. The Arkis Insurance Fund is designed to cover potential losses from liquidations. A notable feature of Arkis is its hybrid architecture. The on-chain features include the liquidity pools, insurance fund, margin accounts, and their related integrations to facilitate trades with DeFi protocols. All functionality relating to initially opening and funding a Margin Account, assessing position health, and performing liquidations is performed/initiated off-chain by the Arkis back-end. **We would like to emphasize that this audit only covers the on-chain features of the protocol and cannot verify the correctness of position health evaluation or timely liquidations.** Over the course of the audit, we found issues relating to Lenders providing interest-free loans (ARK-1), faulty accounting for Lender rewards (ARK-2 & ARK-3), and the potential to overwrite debt entries (ARK-4). Other smaller issues relating to correctly enforcing the whitelisting mechanisms were also uncovered (ARK-6 & ARK-7). We found the project to be well-tested and well-documented. The Arkis team was available to answer any questions and provide code walkthroughs. **Fix Review Update:** All of the listed issues have been adequately addressed by the Arkis team.
Issues (17)
Low | Medium | High | Critical | Total | |
|---|---|---|---|---|---|
Not fixed | 2 | 2 | - | - | 4 |
Fixed | 10 | 3 | - | - | 13 |
| Total | 12 | 5 | 0 | 0 | 17 |