What is ‘Taking Leverage’?

Simply put, by providing Collateral you can then borrow multiple times the Collateral amount by paying an ARCH token fee to access Leverage. Here is a hypothetical Archimedes example:

  1. You open a position with Archimedes that has 10,000 OUSD as Collateral
  2. You can borrow x10 times that collateral amount.
  3. So, now your Total Position Value is roughly 100,000 OUSD
  4. This means you now earn OUSD’s base interest on the Total Position of 100,000 yield barring OUSD

What is the Underlying Asset/Collateral?

The types of assets that Archimedes leverages are called Yield-bearing stablecoins.

What are “Yield-bearing stablecoins”?

“Yield-bearing stablecoins” have the following characteristics:

  1. Pegged 1:1 to the USD (and in the future BTC, ETH, etc…)
  2. Natively appreciating: the stablecoins protocol team runs a strategy that generates yield for the stablecoin holders
  3. No negative yield scenario: When everything works, these stablecoin yields are always above 0% APY