Whitepaper
The current version v2026-01 of the whitepaper (PDF) can be found here.
Executive Summary
Arcturus Finance is a stablecoin issuer that mints multi-currency stablecoins (e.g., EUR, CHF, GBP, USD) through an over-collateralized CDP (Collateralized Debt Position) system. Users lock approved collateral in on-chain vaults and mint currency-pegged stablecoins against that collateral, subject to risk parameters such as collateralization ratios, fees, and liquidation rules.
Arcturus is designed for both retail and institutional use cases, including payments, treasury management, exchange liquidity, and on-chain settlement. The protocol prioritizes predictable rules, deep liquidity, transparent collateralization, and operational reliability (APIs, clear SLAs for integrators).
Key goals:
Issue stablecoins that track multiple fiat currencies with transparent on-chain collateral backing.
Provide a robust risk engine (oracles, parameter governance, automated liquidations).
Enable broad distribution via exchanges, wallets, and Layer-2 networks.
Offer clear paths to liquidity, redemption, and institutional integrations.
This document is a draft that describes the protocol design, stakeholders, and economic model. It is not investment advice and does not constitute an offer of securities or financial products.
Market Context and Problem
Stablecoins have become a key primitive for on-chain commerce and settlement, but most supply and liquidity remain concentrated in a small number of dollar-pegged assets. Outside USD, users face limited availability, fragmented liquidity, and inconsistent on/off-ramp experiences.
Arcturus targets three gaps:
Multi-currency demand: reliable EUR/CHF/GBP assets for European commerce and treasury operations.
Transparent backing: clear, on-chain visibility into collateral and risk parameters.
Institutional reliability: predictable rules, APIs, integrations, and operational safeguards.
Chain Overview
At a high level, the Arcturus consists of the following modules:
Stablecoin Module: mint/burn, transfers, and metadata per currency.
Liquidation Module: automated auctions or instant liquidation paths for under-collateralized vaults.
CDP Engine: vault accounting, collateral deposits, debt issuance, and repayment.
Oracle System: price feeds for collateral and (where relevant) FX reference rates.
Risk Parameters: per-collateral and per-currency limits (debt ceilings, liquidation penalties, fees).
Integrations Layer: APIs/SDKs for wallets, exchanges, payment providers, and institutions.
Each currency can be configured with its own collateral basket and parameters. This allows Arcturus to support different risk tolerances and liquidity profiles across EUR, CHF, GBP, and USD stablecoins.
Stablecoin Design
Arcturus stablecoins are minted and burned through vault operations:
Mint: Deposit collateral into a vault and draw stablecoins up to the maximum allowed by the collateralization ratio.
Repay: Return stablecoins to reduce vault debt; fees accrue per risk parameters.
Withdraw: Remove collateral as long as the vault remains above the required collateralization threshold.
The Design Principles:
Currency Separation: Each stablecoin is a distinct asset with its own risk controls.
Operational Simplicity: Stablecoins are standard tokens for easy exchange and wallet support.
Transparency: All collateral, vault states, and parameter changes are on-chain and auditable.
Collateral and Risk Management
Arcturus uses over-collateralization to protect the peg and the system’s solvency. Approved collateral types may include major (bluechip) cryptoassets, liquid staking derivatives, and (where legally/operationally feasible) tokenized real-world assets. Each collateral type is assigned parameters to account for volatility, liquidity, and operational risk.
Core parameters (illustrative):
Minimum collateralization ratio (MCR): The minimum value of collateral relative to issued debt.
Stability fee: An ongoing fee on outstanding debt, which is typically expressed as an annualized rate.
Debt ceiling: The Maximum amount of stablecoin debt that can be issued against a given collateral type.
Liquidation penalty: The additional cost paid by vault owners when liquidations occur.
Oracle update constraints: Staleness limits and circuit breakers to reduce Oracle risk.
Peg Mechanisms and Liquidity
Arcturus aims to maintain stablecoin price stability through a combination of over-collateralization, liquidations, and liquidity provisioning. Distribution partnerships with exchanges, wallets, and Layer-2 Networks are critical to support deep markets and low slippage.
Liquidity strategy components may include:
Listings and incentives: Targeted programs to bootstrap initial liquidity where needed.
Market-maker programs: Predictable rules to support two-sided liquidity.
Peg stability module: Controlled swaps between stablecoins and approved reserve assets to reduce peg deviations.
Cross-chain deployments: issuance and liquidity on selected Cosmos chains to reduce transaction costs and improve UX.
Stakeholders: Who Arcturus Serves
Arcturus is designed as infrastructure. Different stakeholders want different guarantees from a stablecoin issuer (minted through Arctuturus), and in return, they provide adoption, liquidity, distribution, and regulatory legitimacy.
Retail & Prosumers
Cheap, fast transfers; credible fiat; wide acceptance
Adoption & float
Institutions, Treasurers, & Fintechs
Reliable rails; API access; clear SLAs
Volume; sticky balances
Exchanges, Wallets, & L2s
Liquidity & listings; incentive
Distribution; order flow
Market Makers
Predictable rules; fast settlement
Two-sided liquidity
Banks, Custodians, & MMFs
AUM; fees
Safety; liquidity; yield
Regulators
Safeguards; disclosures; consumer protection
License to operate
Business Model: How Arcturus Makes Money
As a CDP-based stablecoin issuer, Arcturus can capture revenue across issuance, outstanding supply, liquidity operations, and integrations. Arcturus is designed so that fees are explicit, parameterized, and visible on-chain.
Primary revenue levers may include:
Stability Fees: Interest-like fees paid by vault owners on outstanding debt.
Origination Fees: One-time fee when minting stablecoins.
Liquidation Penalties: Charged to vault owners when collateral falls below required thresholds.
Swap & Conversion Fees: Spreads or fees in peg-stability or reserve-conversion modules.
Reserve Yield (where applicable): Yield earned on approved reserve assets or cash-equivalent instruments, net of costs.
API Services: Paid tiers for higher throughput, reporting, or compliance tooling for integrators.
The balance of these revenue streams should be calibrated to (i) keep stablecoins competitive for users, (ii) maintain healthy incentives for liquidity providers and market makers, and (iii) fund ongoing risk management, security, and operations.
Governance and Controls
Governance sets and updates risk parameters and can approve new collateral types, adjust fee schedules, and manage emergency procedures. A well-designed governance system separates day-to- day risk operations from long-term strategic decisions.
Recommended control layers:
On-chain voting with timelocks for parameter changes.
Risk council (mandated scope) to propose parameter updates based on market conditions.
Emergency circuit breakers for oracle failures or market dislocations.
Transparent disclosures of collateral composition and risk settings per currency.
Compliance, Disclosures, and Consumer Protection
Arcturus intends to operate with a compliance-first posture. Depending on jurisdictions and integrations, this can include disclosures on collateral and risks, limits on certain features for restricted geographies, and collaboration with regulated partners (custodians, banks, or money market fund providers) where required.
Disclosures should cover, at a minimum:
Collateral types and concentration limits.
Risks (market, oracle, smart contract, liquidation, custody for any off-chain assets).
Fee schedules and how fees can change (governance process).
Redemption and recovery mechanisms (if any), including limitations.
Security and Resilience
Independent audits for all core contracts and critical upgrades.
Continuous monitoring (oracles, collateral health, liquidations, abnormal flows).
Bug bounty program and responsible disclosure process.
Defense-in-depth design (permissioning where necessary, circuit breakers, separation of duties).
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