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The core idea: Deposit USDC, receive two tokens: ST (USDC outcome) + EPT (points outcome). The organizing equation (ignoring fees):1 USDC deposited=1R ST+1 EPT1 \text{ USDC deposited} = \frac{1}{R} \text{ ST} + 1 \text{ EPT}ArcX is like a fund manager who separates your principal receipt from your loyalty points voucher. You can sell either one independently.

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The Problem: Points Farming is Broken

On perp trading terminals, you earn points by trading volume, but your capital is tied up in open positions, your points are non-transferable, and there’s no way to separate the trading PnL from the points exposure. On perp DEXes like Pacifica, Hyperliquid, or Extended:
  1. Your capital is locked. To earn points, you need positions open. That capital can’t do anything else.
  2. Points and PnL are bundled. A funding arb earns USDC returns AND exchange points, but they’re stuck together.
  3. No liquidity for points. Pre-TGE points have no market.
  4. No way to speculate on points alone. Want more points exposure? You have to deposit more capital into the strategy.
ArcX does this differently: Buy point tokens directly. No mental gymnastics. No trading PnL risk.
Before ArcXAfter ArcX
Earn points? Must lock capital in strategyDeposit + flash loop: leveraged points, fraction of the capital
Want only USDC returns? Must hold points riskBuy discounted ST on ArcX AMM: pure USDC exposure
Sell points pre-TGE? No market existsSell ST from deposit, keep EPT: monetize immediately
Trade for points, eat losses along the wayBuy point tokens directly, no trading PnL risk

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The Solution: Tokenized Splitting + Flash Loop

ArcX splits a strategy position into two tokens at the moment of deposit: ST is tradeable on the ArcX AMM. You get EPT by depositing USDC.

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The Flash Loop: Capital-Efficient Points

The flash loop is how you get leveraged points exposure. It works atomically: deposit USDC, sell the resulting ST on the ArcX AMM, re-deposit the proceeds, and repeat. Each iteration creates new EPT (which you keep) while recycling ST sale proceeds into more deposits.
1

Deposit USDC

Deposit $100 into a strategy. You receive 100 EPT + ST shares.
2

Sell ST on the ArcX AMM

Sell your ST at the current market price. With a 10% discount to NAV, you receive **$90** in USDC.
3

Re-deposit the proceeds

Deposit the $90 back into the same strategy. You receive 90 EPT + more ST shares.
4

Repeat

Sell ST again (~$81), re-deposit for 81 EPT, and continue. Each iteration adds more EPT at the same effective cost per token.
Worked example (3 iterations, 10% ST discount):
IterationDepositEPT ReceivedST Sale Proceeds
1$100100~$90
2$9090~$81
3$8181~$73
Total~271 EPT
Your effective outlay is ~$27 (the $100 you started with minus the ~$73 you still hold from the final ST sale). That gives you ~271 EPT for ~$27 of net cost, or roughly $0.10 per EPT instead of $1.00 per EPT from a single deposit-and-hold.
Flash loop early in the epoch. Earlier deposits accrue credits for longer, maximizing your share of points at finalization. The flash loop is most valuable at the start of the epoch when time-weighted credit accrual is greatest.
Why this works: Each deposit mints EPT (which you keep) and ST (which you sell). The ST discount is the “price” you pay for points. Yield seekers who buy your discounted ST capture that discount as their return. The two-sided market — points farmers selling ST, yield seekers buying ST — is the core ArcX flywheel.

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The Three Tokens

TradFi analogies: ST = closed-end fund share. EPT = pre-market points futures. = gift card redeemable at TGE. Strategies earning points on multiple exchanges mint a separate EPT for each. A $100 deposit into Pacifica-Extended Funding Arb gives you ST shares + EPT_Pacifica + EPT_Extended. For the full comparison table, minting mechanics, and fee structure, see Token Economics.

Strategy Token

NAV tracking, share pricing, redemption, early exit.

Expected Points Token

Credit system, checkpointing, worked examples.

PointsToken

Points backing, post-TGE redemption.

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Two Ways to Use ArcX

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1. Points Farmer (Leveraged EPT via Flash Loop)

Profile: You want maximum points exposure with minimal capital. Alice has $100 and wants Pacifica points.
  1. Alice deposits $100 into Pacifica-Extended Funding Arb
  2. She receives ST shares + EPT_Pacifica + EPT_Extended
  3. She sells all ST on the ArcX AMM for ~$90 (ST trades at ~10% discount)
  4. She re-deposits the $90, sells ST again, repeats
  5. After 3 loops: ~270 EPT from $100 of capital
Result: Alice has ~270 EPT (points exposure) from only $100. Net outlay: ~$27 ($100 minus ~$73 from the final ST sale). Effective cost: ~$0.10 per EPT instead of $1.00 from a single deposit. Compare to trading on a perp aggregator where you’d need to actively trade $100, earning points from volume but eating trading losses along the way. Risk: Strategy loss reduces the USDC she recovers from ST sales. If points turn out worthless, EPT has no value.

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2. Yield Seeker (Discounted ST for Fixed APR)

Profile: You want predictable USDC returns without points exposure. Bob has $90 and sees points farmers dumping ST on the ArcX AMM at a 10% discount.
  1. Bob buys ST at $0.90 on the ArcX AMM
  2. The strategy earns ~1% over the epoch
  3. At maturity, ST redeems at ~$1.01
  4. Bob’s return: ($1.01 - $0.90) / $0.90 = 12.2% in one epoch
Result: If epochs run ~3 months, that’s roughly ~49% annualized. Bob doesn’t care about points at all. Risk: Strategy PnL could be negative (ST redeems below $1.00). AMM liquidity risk if Bob needs to exit early.

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Secondary Personas

The Depositor (Hold Everything): Deposit $100, hold both ST and EPT for the full epoch. Earn strategy returns AND points. Simple, no trading required. The Strategy Speculator: Buy ST on the ArcX AMM at a discount without depositing. Pure bet on strategy performance. No points exposure. For complete step-by-step instructions, see Using ArcX.

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What Can Go Wrong

  • Strategy loses money. ST redeems for less than deposited. Worst case: $0. EPT is unaffected.
  • Deposit late in epoch. Fewer credits = fewer points at finalization.
  • No TGE. If the exchange never launches a token, PointsTokens have no redemption path.
  • ArcX misreports data. All oracles are ArcX-operated. See Trust Model.
  • Cross-chain deposit stuck. LayerZero transit typically 1-5 minutes. Refund timeout available if it fails.

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Architecture at a Glance

For the full contract reference and sequence diagrams, see the deep dives.

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Epochs and Trust

Epochs: ArcX runs in fixed epoch windows that progress through three stages: ACTIVE (deposits open, credits accruing), MATURITY (strategy unwinds, no new deposits), and FINALIZED (redemption unlocked). Each epoch is independent — there is no automatic rollover. When one epoch finalizes, you redeem your ST for USDC and claim your EPT for PointsTokens, then decide whether to deposit into the next epoch. Epoch duration is strategy-specific but typically runs 1-3 months. See How Epochs Work for the full lifecycle, timing, and edge cases. Trust model: ArcX operates all oracles (NAV, credits, final points), executes the underlying strategy off-chain, and is the sole backer of PointsTokens. This is an explicitly centralized system that trades trustlessness for speed to market and operational flexibility. The trust assumptions are: ArcX reports NAV honestly, distributes points fairly, and doesn’t redirect deposited funds. See Trust Model & Security for the full analysis.