Arche Documentation

Arche is a yield infrastructure protocol built on Ethereum. At its core is arUSD — a yield-bearing stablecoin backed 1:1 by USDC. When you deposit USDC into the Arche vault, you receive arUSD, a composable ERC-4626 token that appreciates in value as the underlying strategies generate returns.

The protocol is designed around a single principle: maximize risk-adjusted yield on stablecoins without sacrificing liquidity or transparency. There are no lock-ups, no withdrawal delays, and no hidden mechanics. Every contract is on-chain and verifiable.

arUSD is the receipt token you receive when depositing USDC into the Arche vault. It follows the ERC-4626tokenized vault standard, meaning it's composable with any DeFi protocol that supports the standard.

How the price works

arUSD uses a price-per-share model. As the vault's strategies generate yield, the total assets in the vault increase while the arUSD supply stays constant. This means each arUSD becomes redeemable for more USDC over time. You don't need to claim or harvest — yield is reflected automatically in the token price.

Minting & redeeming

Deposit USDC → receive arUSD. The amount of arUSD you receive is determined by the current price-per-share. When you withdraw, your arUSD is burned and you receive the equivalent USDC based on the current share price. Withdrawals are instant and permissionless.

The Arche Engine is the allocation layer that routes capital across multiple yield strategies. It determines where funds are deployed based on risk-adjusted return, liquidity depth, and protocol health.

The engine operates through a strategy queue — an ordered list of approved strategies that the vault allocates to. Each strategy is independently audited, has defined risk parameters, and can be added or removed through governance.

Capital allocation is not static. The engine continuously evaluates market conditions and rebalances across strategies to optimize returns while maintaining instant withdrawal liquidity for depositors.

Arche deploys capital across four categories of yield strategies, each serving a different risk-return profile:

DeFi lending

Supplying stablecoins to battle-tested lending protocols to earn borrow interest. These form the base yield layer — lower returns but deep liquidity and proven track records.

Delta-neutral strategies

Market-neutral positions that capture funding rates and basis spreads without directional exposure. These strategies profit from the structural premium that perpetual futures markets pay to long positions, while hedging away price risk entirely.

Market making

Providing liquidity across on-chain venues and earning the bid-ask spread. Positions are actively managed to minimize inventory risk and impermanent loss while capturing consistent trading fees.

Options strategies

Systematic options selling strategies that harvest volatility premium. These typically involve writing covered calls or cash-secured puts on major assets, collecting premium while maintaining defined risk boundaries.

The Arche protocol consists of a minimal set of smart contracts, each with a clearly defined role:

Vault (arUSD)

The core ERC-4626 vault that accepts USDC deposits, mints arUSD, and processes withdrawals. Built on Yearn v3 MultiStrategy infrastructure (API version 3.0.4), which has been battle-tested across billions of dollars in DeFi.

Strategy layer

Individual strategy contracts that deploy capital to specific yield sources. Each strategy is a separate contract in the vault's allocation queue, allowing modular upgrades — new strategies can be added and old ones retired without touching the vault itself.

Accountant

The HealthCheckAccountant validates strategy reports and enforces fee parameters. Currently configured with 0% management and 0% performance fees. Any fee changes require multisig approval and are visible on-chain before they take effect.

Yield flow

All contracts are deployed on Ethereum mainnet and verified on Etherscan. Click any address to view the contract source and on-chain state.

All protocol parameters are controlled by a 2-of-3 Gnosis Safe multisig. No single key can move funds, change fees, modify strategy allocation, or shut down the vault. Every governance action is an on-chain transaction that can be verified before and after execution.

What governance controls

• Adding or removing strategies from the vault queue
• Setting strategy debt limits and allocation weights
• Modifying fee parameters on the accountant
• Emergency shutdown (pauses deposits, not withdrawals)
• Role assignment and access control

What governance cannot do

• Block or delay withdrawals — withdrawals are always permissionless
• Access depositor funds directly — funds are in the vault and strategies
• Upgrade the vault contract — the vault is immutable once deployed

Arche is built on top of infrastructure that has been independently audited and collectively secures billions in value across DeFi.

Audit status

The vault and accountant use Yearn v3 contracts (audited by ChainSecurity, Statemind, and others). The underlying yield sources (Sky Savings Rate, lending protocols) each have their own extensive audit histories. No custom or unaudited code sits between depositor funds and the yield source.

Risk factors