Glossary & Parameters

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Glossary

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A

Admin The ArcX-operated address with privileged access to protocol functions (pause, finalize, configure fees). Example: Admin calls finalize() after the strategy unwind is complete, enabling ST and EPT redemptions. alreadyClaimed Per-user counter tracking how many PointsTokens have been claimed from a given EPT contract. Prevents double-claiming across multiple claimPoints() calls. Example: Alice claims 300 PointsTokens. Her alreadyClaimed is set to 300. If she calls claimPoints() again, the contract computes gross - 300 to avoid minting duplicates. ArcX AMM The custom Pendle-style AMM used for trading ST/USDC. Features a time-decay curve that converges ST price toward NAV as the epoch approaches maturity. Only ST trades on the AMM; EPT is deposit-only. Example: Points farmers sell ST on the ArcX AMM after flash looping. Yield seekers buy discounted ST on the same pool. Arbitrage (Upward) The self-correcting mechanism that caps the combined value of ST + EPT at $1. If the implied EPT cost plus ST price exceeds the deposit cost, points farmers flash loop more aggressively, selling ST and widening the discount until equilibrium. Example: ST trades at $0.98 (EPT cost = $0.02). Points farmers flash loop heavily, ST drops to $0.90 (EPT cost = $0.10). Arbitrage (Downward, broken) The mechanism that would correct a too-wide ST discount by buying cheap ST + EPT and redeeming for $1. This doesn’t work because there is no early redemption. You can’t burn ST + EPT for USDC before finalization. Example: ST trades at $0.80 (20% discount), but no one can profitably correct this because redemption is locked.

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C

Checkpoint The lazy evaluation operation that settles a user’s accrued credits at the moment of any EPT transfer, mint, or claim. Both sender and receiver are checkpointed. Example: When Alice transfers 50 EPT to Bob, Alice’s credits from the holding period are locked, and Bob’s credit counter starts fresh from the transfer timestamp. claimPoints() EPT function called after finalization. Settles the caller’s credits, computes their share of totalPoints, deducts the redemption fee, and mints net PointsTokens. Example: Alice has 4,320,000,000 credits out of 6,048,000,000 total. totalPoints = 1,000. She receives (4,320M / 6,048M) x 1,000 = 714 gross points, minus fee. Credit The activity-weighted holding measure that determines a user’s share of points. credits = integral(balance x creditRate) dt. More EPT held, for longer, during higher-activity periods = more credits. Example: Holding 100 EPT for 259,200 seconds at creditRate = 10 produces 259,200,000 credits. creditRate The rate at which credits accrue per EPT per second. Set by the Credits Oracle. Reflects strategy activity: higher open interest or volume means a higher creditRate. Example: For a funding arb strategy with $500K OI, creditRate might be 500. If OI doubles to $1M, creditRate updates to 1,000. Credits Oracle ArcX-operated off-chain service that pushes creditRate updates to EPT contracts during the epoch. Update frequency is approximately every 5—15 minutes. Example: The Credits Oracle observes the strategy’s OI increased from $200K to $400K, and pushes updateCreditRate(400) to the EPT contract. Cross-chain deposit A deposit originating from a non-Starknet chain (Ethereum, Arbitrum, Solana). USDC is locked in a SourceChainDepositEscrow, a LayerZero message delivers the deposit instruction to Starknet, and tokens are minted at arrival-time NAV. Example: Alice deposits from Ethereum. Her USDC is locked for ~3 minutes while LayerZero delivers the message. ST + EPT are minted on Starknet when the message arrives.

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D

Deposit cutoff Configurable parameter (depositCutoff) specifying how many seconds before epochEnd deposits stop being accepted. Default is 0 (deposits accepted until maturity). Example: With depositCutoff = 3600, deposits stop 1 hour before the epoch ends. Deposit fee A fee charged on gross USDC at deposit time. Covers operational costs and serves as sandwich attack defense. Configurable per strategy. Example: With a 0.5% deposit fee, a $100 deposit yields $99.50 net USDC, which is used to mint ST shares and EPT.

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E

Epoch A fixed-duration window (typically 8—12 weeks) during which a strategy runs. Each epoch creates new ST and EPT contract instances. Epochs progress through three states: ACTIVE --- MATURITY --- FINALIZED. Example: Epoch 7 runs for ~3 months. Epoch 8 starts after Epoch 7 finalizes. epochId Unique identifier for an epoch. Encoded in contract deployments and token names. Example: ST-PacificaFundingArb-E007 is the ST token for Epoch 7 of the Pacifica Funding Arb strategy. EPT (Expected Points Token) ERC20 with built-in credit accrual. Represents a claim on exchange points earned during the epoch, weighted by holding duration and strategy activity. One EPT contract per epoch per exchange per strategy. EPT is deposit-only and does not trade on any AMM. Example: Alice deposits $100 into Pacifica-Extended Funding Arb and receives 99.50 EPT_Pacifica + 99.50 EPT_Extended. EPT implied cost The theoretical cost of EPT derived from the minting parity equation: EPT_cost = 1 - X/R, where X = ST market price on the ArcX AMM and R = ST exchange rate. Example: ST trades at $0.90, exchange rate R = 1.0. EPT_cost = 1 - 0.90/1.0 = $0.10.

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F

Finalization The event where the admin calls finalize() after the NAV Oracle reports finalNAV and the Final Points Oracle reports totalPoints. Enables ST --- USDC redemption and EPT --- PointsToken claiming. Example: Epoch 7 ends. Within 1—2 days, positions are unwound and USDC is returned. Admin finalizes. Users can now redeem. Final Points Oracle ArcX-operated off-chain service that reports the total number of exchange points earned during the epoch. Called once per epoch, after maturity. Example: The strategy earned 12,500 Pacifica points during Epoch 7. The Final Points Oracle pushes finalizePoints(12500) to the EPT_Pacifica contract. Flash loop The iterative mechanism for acquiring leveraged EPT exposure. Deposit USDC --- receive ST + EPT --- sell ST on ArcX AMM --- re-deposit proceeds --- repeat. Each iteration accumulates more EPT while recycling capital through ST sales. Example: $100 deposit --- sell ST for $90 --- re-deposit $90 --- sell ST for $81 --- re-deposit --- after 3 loops, hold ~271 EPT.

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G

globalCreditIndex A cumulative counter tracking total credit-seconds per EPT unit since the epoch started. Updated on every global checkpoint. Used to compute per-user credits via the delta: userCredits += balance x (globalCreditIndex - userCreditIndex). Example: After 259,200 seconds at creditRate 10, globalCreditIndex = 2,592,000.

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L

LayerZero (LZ) The cross-chain messaging protocol used to deliver deposit instructions from source chains to Starknet. Typical latency: 1—5 minutes. Worst case: ~30 minutes. Example: Alice’s deposit message travels from Ethereum to Starknet via LayerZero in ~3 minutes.

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M

MATURITY The second epoch state. Entered when the epoch end time is reached. Strategy positions are unwound, no new deposits accepted, and settlement begins. Example: Epoch 7 enters MATURITY when the epoch end timestamp is reached. The strategy runner closes positions on Pacifica and Extended. MAX_NAV_STALENESS Hardcoded parameter (30 minutes). If the NAV oracle hasn’t updated within this window, deposits automatically revert. Prevents depositing against stale pricing. Example: NAV was last updated 35 minutes ago. Alice’s deposit transaction reverts with a staleness error. Minting parity The protocol-enforced relationship: 1 USDC deposited = (1/R) ST + 1 EPT. This equation defines the conservation law for token creation and is the basis for the flash loop cost calculation. Example: If R = 1.0, depositing $1 gives you 1 ST share + 1 EPT. The flash loop exploits this by selling ST and re-depositing. Multi-EPT The pattern where a single deposit into a cross-exchange strategy produces separate EPT tokens for each exchange. Example: Depositing into the Pacifica-Extended Funding Arb produces 1 ST + EPT_Pacifica + EPT_Extended. Three tokens from one deposit.

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N

NAV (Net Asset Value) The total USDC value of all strategy positions for an epoch, reported by the NAV Oracle. Determines ST share price (sharePrice = NAV / totalShares). Example: The strategy holds $50K long on Pacifica and $50K short on Extended. NAV = $100K + accumulated PnL = $101,500. NAV Oracle ArcX-operated off-chain service that reports strategy NAV to the ST Vault every 5 minutes. Computes NAV from exchange position data (principal + unrealized PnL + fees). Example: The NAV Oracle reads position values from Pacifica and Extended APIs, sums them, and pushes the total to the ST Vault contract.

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P

Pacifica A Solana-based perp DEX integrated with ArcX. One of the launch exchanges for the Pacifica-Extended Funding Arb strategy. PointsToken: xPC. Example: ArcX opens long positions on Pacifica as part of the cross-exchange funding arb. Pause Admin action that stops new deposits into an epoch. Does not affect the epoch lifecycle, trading on the ArcX AMM, credit accrual, or redemptions. Example: A suspected oracle issue triggers a pause. Existing positions are unaffected, but no new deposits are accepted until the admin calls unpause(). pointsPerCredit The conversion ratio computed at finalization: totalPoints / totalCredits. Determines how many points each credit is worth. Example: totalPoints = 1,000, totalCredits = 864,000,000. pointsPerCredit = 0.000001157. A user with 561,600,000 credits receives 650 points. PointsCollector Admin-callable contract that claims PointsTokens on behalf of whitelisted contract addresses. Used to distribute pool credits to participants via merkle tree. Example: After Epoch 7 finalizes, admin calls PointsCollector to claim a contract’s accrued credits, then creates a merkle distribution. PointsToken ERC20 representing tokenized exchange points, 1:1 backed by real points in ArcX’s exchange account. One contract per exchange (xPC for Pacifica, xHL for Hyperliquid, xET for Extended). Persists across epochs. Example: Alice claims 450 PointsTokens (xPC) from Epoch 7. She already had 320 xPC from previous epochs. Her total: 770 xPC.

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R

Redemption fee Fee charged when converting EPT credits to PointsTokens. Deducted from gross PointsTokens before minting. Configurable per EPT contract. Example: Alice’s gross claim is 714 PointsTokens. With a 2% redemption fee, she receives 699 net PointsTokens. Redemption Module Shared Cairo trait used by both EPT (credits --- PointsToken) and PointsToken (PointsToken --- airdrop tokens). Implements the burn-to-claim pattern with incremental claiming via alreadyClaimed tracking. Example: The same code path handles Alice claiming PointsTokens from EPT and later burning those PointsTokens for airdrop tokens post-TGE. Refund timeout Configurable parameter on SourceChainDepositEscrow. If a cross-chain deposit isn’t acknowledged within this window, the user can call cancel() to recover locked USDC. Example: Alice’s cross-chain deposit hasn’t been acknowledged after 30 minutes. She calls cancel(depositId) and gets her USDC back.

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S

sharePrice The current USDC value of one ST share: currentNAV / totalShares. Updated every time the NAV Oracle pushes a new value. Example: NAV = $103,000, totalShares = 100,000. sharePrice = $1.03. SourceChainDepositEscrow Contract deployed on each supported source chain. Locks user USDC, sends a deposit message via LayerZero to Starknet, and either releases USDC to the ArcX multisig (on acknowledgment) or refunds to the user (on timeout). Example: On Ethereum, Alice approves USDC on the escrow contract and calls depositUSDC(). Her USDC is locked until Starknet acknowledges the deposit. ST (Strategy Token) ERC4626-like vault share representing a claim on the epoch’s USDC NAV at finalization. One ST contract per epoch per strategy. Tradeable on the ArcX AMM during the epoch, redeemable for USDC after finalization. Example: Alice deposits $100, receives ~99.50 ST shares. The strategy makes 2%. She redeems for ~$101.50. Strategy An actively managed trading approach executed by ArcX on perp DEXes. Each strategy has its own vault, producing unique ST and EPT tokens each epoch. Example: “Pacifica-Extended Funding Arb” is a strategy that goes long on one exchange and short on another to capture funding rate differentials. Strategy Runner ArcX’s off-chain service that executes perp DEX trades using deposited USDC as margin. Operates on exchange accounts controlled by ArcX. Example: The Strategy Runner opens a $50K long position on Pacifica and a $50K short position on Extended to execute the funding arb strategy.

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T

TGE (Token Generation Event) The moment when a perp DEX launches its token and distributes airdrops. After TGE, PointsTokens become redeemable for airdrop tokens via the Redemption Module. Example: Pacifica conducts TGE and distributes PCA tokens. ArcX deposits PCA into the Redemption Module. xPC holders can now burn xPC to receive PCA. Time-decay curve The AMM pricing function used by the ArcX AMM for ST/USDC pools. Concentrates liquidity around expected ST price ranges and steepens as maturity approaches, pulling ST price toward NAV. Inspired by Pendle’s logit-based curve. Example: At epoch start, the curve allows a wide trading range. Near maturity, the curve forces ST price close to NAV. totalCredits Running sum of all users’ settled credits across the epoch. Used as the denominator in points distribution: yourShare = yourCredits / totalCredits. Example: At finalization, totalCredits = 864,000,000. Alice has 561,600,000 credits, giving her a 65% share. totalPoints The actual number of exchange points earned during the epoch, reported by the Final Points Oracle at finalization. Used as the numerator in points distribution. Example: The Pacifica-Extended Funding Arb strategy earned 1,000 Pacifica points during Epoch 7. totalPoints = 1,000.

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U

userCheckpoint The per-user credit settlement operation. Computes newCredits = balance x (globalCreditIndex - userCreditIndex), adds to the user’s credit total, and updates their index to the current global value. Triggered on every transfer, mint, and claim. Example: Alice’s last checkpoint was at globalCreditIndex = 1,000,000. The index is now 2,592,000. Her 100 EPT earns 100 x (2,592,000 - 1,000,000) = 159,200,000 new credits. userCreditIndex Per-user marker tracking the globalCreditIndex value at the user’s last checkpoint. The delta between the current global index and the user’s index, multiplied by their balance, gives unsettled credits. Example: Alice’s userCreditIndex = 2,592,000. Global is now 5,184,000. Delta = 2,592,000. With 50 EPT balance, she has 129,600,000 unsettled credits.

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Protocol Parameters

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Hardcoded

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Configurable (Per Strategy / Per Epoch)

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Operational (Off-Chain)

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Token Reference

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Naming Convention

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Exchange Reference

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Key Equations

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Epoch State Machine Quick Reference

*Trading can continue on the ArcX AMM even after finalization, but there’s no economic reason to. You can redeem directly.

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Trust Surface Quick Reference

Full analysis: Trust Model & Security

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Document Index