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The core idea: A single USDC deposit creates two tokens: ST for the USDC outcome, EPT for the points outcome. A third token, PointsToken, bridges EPT credits to real exchange points.

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How Tokens Are Created

The organizing equation: 1 USDC deposited=1R ST+1 EPT1 \text{ USDC deposited} = \frac{1}{R} \text{ ST} + 1 \text{ EPT} Where R = current ST exchange rate ( / totalShares). Every deposit produces both tokens in a single transaction: 
deposit(100 USDC)
  ├─ deduct deposit fee → netUSDC = 99.5 USDC
  ├─ mint ST shares:  shares = netUSDC × totalShares / currentNAV
  └─ mint EPT:        amount = netUSDC (99.5 EPT)
Multi-exchange strategies create one EPT per exchange. Depositing $100 into Pacifica-Extended Funding Arb gives you: 1 ST + 99.5 EPT_Pacifica + 99.5 EPT_Extended. Three tokens from one deposit.
Two users depositing $100 at different NAVs get different ST shares but contributed the same capital. EPT tracks capital contribution, not share count.

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Quick Reference

ST (Strategy Token)EPT (Expected Points Token)PointsToken (xPC, xHL)
TL;DRClaim on USDC at maturityClaim on exchange pointsTokenized points, 1:1 backed
AnalogyClosed-end fund sharePre-TGE points futuresGift card for airdrop tokens
Minted whenYou deposit USDCAlongside ST, automaticallyAt finalization, when you claim EPT
Value driverStrategy PnL × points valueTGE timing × airdrop generosity
Can go to zero?Yes (total strategy loss)Effectively yes (worthless points)Effectively yes (no TGE)
Tradeable?Yes, on ArcX AMMNot tradeable (mint via deposit only)Yes, standard ERC20
ExpiryNoneNoneNone
ScopePer epoch, per strategyPer epoch, per exchange, per strategyPer exchange, persists across epochs

Strategy Token (ST)

How ST shares are calculated, NAV tracking, redemption, and early exit via the ArcX AMM.

Expected Points Token (EPT)

The credit system, checkpointing, worked examples, and the minting parity equation.

PointsToken

Points backing, post-TGE redemption, multi-tranche airdrops.

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The Complete Token Lifecycle

Every token passes through a single from minting to redemption:

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The Flash Loop

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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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Token Naming

TokenPatternExampleScope
STST-{Strategy}-E{epoch}ST-PacificaFundingArb-E007Per epoch per strategy
EPTEPT-{Exchange}-E{epoch}EPT-Pacifica-E007Per epoch, per exchange, per strategy
PointsTokenx{Exchange}xPC, xHL, xETPer exchange, persists

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Fee Structure

FeeWhenAmountPurpose
Deposit feeAt depositPer strategy (0.01%–0.5%)Operational costs + sandwich defense
Redemption feeEPT → PointsToken claimConfigurable per strategy; check contract parameters at launchProtocol revenue
ST redemptionNoneNo feeDeposit fee covers costs
AMM swap feesAny ArcX AMM tradeStandard ratesAMM fee, not ArcX revenue
The deposit fee covers real costs (bridging, spreads) and defends against sandwich attacks. For funding arb strategies, even 0.01% suffices. Market-making strategies need 0.3–0.5%.

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Frequently Asked Questions

No. ST floors at $0. Your maximum loss is the USDC you deposited. EPT and PointsTokens represent points claims, not capital positions.
The strategy earns points on two exchanges. You get 1 ST (combined USDC NAV) + 1 EPT per exchange. If the strategy used one exchange, you’d get 2 tokens.
Both remain redeemable indefinitely after finalization. No expiry. PointsToken post-TGE redemption depends on the exchange’s timeline.
Yes, but no automatic rollover. Redeem from Epoch N, then deposit into Epoch N+1. Each epoch is independent.