Arc Systems protocol

Arc Systems is an Arc-first USDC credit market. The initial protocol deliberately uses a single debt asset — USDC — with a small set of governed collateral assets.

Market model

Liquidity suppliers deposit ERC-20 USDC and receive internal supply shares. Borrowers deposit approved collateral and borrow USDC against governed loan-to-value limits. Interest accrues through a utilization-based kink rate model.

Risk model

Collateral is isolated behind explicit LTV, liquidation threshold, liquidation bonus and collateral caps. The market also has a USDC borrow cap, oracle freshness requirements, reserve accounting, insolvency handling and emergency pause controls.

borrow power = Σ(collateral USD value × LTV)
health factor = liquidation-adjusted collateral / current debt

A normal risk pause blocks new risk while allowing repayment, lender withdrawal and required liquidations. A liquidation emergency pause also blocks new risk.

Governance

The Pool and Oracle are currently administered by the deployment wallet; the Timelock is deployed but not yet in the authority path. Supported assets: USDC (supply / borrow) and tWETH (collateral).

The mainnet authority path is Safe multisig → Timelock → Pool / Oracle. A guardian can trigger emergency pauses but cannot immediately rewrite risk parameters or extract reserves.

Integration

Read-only integrations should use the public HTTP API documented in the API reference. Transaction integrations should use the deployed Pool ABI and verify the release manifest, contract bytecode, USDC address, Oracle and Timelock before enabling writes.