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ArcX is designed so that asset ownership, token balances, series settlement, and credit computation happen on-chain. But users should still understand where trust exists today and what risks remain. Two high-level notes:
  • Audits: ArcX contracts are intended to be audited, and reports will be shared publicly when available.
  • Source availability: Contracts are closed source at the beginning. They will be opened up over time once the system has seen enough production use, confidence, and battle testing.

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vToken

The vToken contracts are on-chain and self-custodial.
  • user balances, transfers, supply, and NAV all live on-chain
  • credit computation also happens on-chain
  • ArcX does not take custody of user funds inside the vToken system
Today, ArcX uses Wildcat to lend capital to market makers. The movement of funds from Starknet into Wildcat is handled through smart contracts, not through ArcX-controlled wallets. That means ArcX does not become the custodian of funds during the lending flow. But users are still taking borrower default risk through the underlying market maker relationship. ArcX partners with market makers and lists them on the platform, but ArcX does not guarantee borrower performance. If a market maker fails to repay or defaults on its borrowing obligations, that risk ultimately sits with the users who chose to allocate capital to that vToken. Users should treat a vToken as both:
  • an on-chain self-custodial position
  • an economic exposure to the creditworthiness and execution quality of the underlying market maker

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ST and EPT

All ST and EPT contracts are on-chain. The core contract that handles:
  • series creation
  • splitting vToken into ST + EPT
  • recombining ST + EPT
  • order settlement
  • redemption
also lives on-chain. ArcX does run an off-chain orderbook service to find the best matchable orders. That off-chain component exists because smart contracts cannot do unbounded search over all open orders. But once the service proposes a match set, the orders are checked on-chain against the user’s constraints. That means the on-chain contracts verify that execution remains within:
  • the APR bounds the user set
  • the slippage bounds the user set
So ArcX cannot simply route user orders to arbitrary prices or drain funds through the matching service. The off-chain component helps find candidate matches, but settlement and constraints are enforced on-chain.

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Points Oracle and Custody

Points are the main place where ArcX still depends on an off-chain trust boundary. Today, ArcX custodies points either:
  • in an ArcX-controlled exchange account, or
  • together with the market maker on the relevant exchange
ArcX then acts as the oracle to the on-chain contracts by reporting how many points were received, so that PointsTokens can be minted and distributed to vToken and EPT holders. This means users are trusting ArcX to report the correct number of points earned off-chain. Over time, ArcX plans to reduce this trust requirement by:
  • using independent third-party auditors to verify reported point balances, or
  • integrating more closely with exchanges so points can be attributed to ArcX users more directly

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What Users Should Actually Check

Before allocating capital, users should evaluate:
  • the market maker behind the vToken
  • the Wildcat borrowing setup and borrower risk
  • the terms of the specific series they are trading
  • the current points-oracle trust assumptions
The smart-contract layer makes custody and settlement transparent. It does not remove the need to evaluate counterparty risk, operational risk, and oracle trust.