Arkis

Crypto credit still treats risk as something reconstructed after the fact - collateral sits on one venue, positions on another and exposure only becomes visible once markets move. We think this is the wrong architecture for institutional markets.

There's a two-way migration happening this cycle that doesn't fit the dominant narrative. The same crypto-native institutions that ran the famous ETH looping trades on Aave - the trades that defined DeFi yield for two years in terms of capacity and strategy. Now, crypto institutions are building rails offchain into TradFi to access bigger capacity. Meanwhile, Crypto builders and more agile TradFi institutions are launching tokenized money market funds, tokenized credit, and tokenized everything, trying to capture demand onchain. Crypto's most sophisticated capital is leaving the rails just as TradFi is arriving on them. The actual buyers of those tokenized products are walking the other way. Tokenization narratives assume a one-way flow into onchain markets. The reality is bilateral, and right now the side with capital is going out. We are working on the unlock while others are trying to onboard a large enough onchain universe for things to become interesting. Arkis was always striving to be an infrastructure that bridges both sides - the most unique cross-margining capability across all relevant trading universes. We've been cooking something to connect this bilateral flow and bring efficiency to the market. No matter where it sits - onchain or offchain. More soon.

The kelpDAO incident reignited the "AAVE's multi-collateral model is fragile, go siloed" take. For me, this approach misses the point. Lenders want to pick their risk exposure → segregated markets. Borrowers want capital efficiency → portfolio margin. In my opinion, both are right. Siloed markets mean collateral drag, fragmented liquidity, and position-level liquidation risk instead of portfolio-level. That's exactly why institutions flooded into AAVE in the first place — portfolio margining is the default at every prime broker and every clearinghouse. Retreating to one collateral per market is a step backward for an industry whose entire pitch is capital efficiency. But the lender side isn't wrong either. Outsourcing your risk preference across N collateral types to a single curator ≠ expressing your own risk view. The real question isn't siloed vs. unified. It's: how do you let lenders define which collateral they back and at what size, while borrowers still cross-margin their full portfolio against the aggregate pool? That's the design problem worth solving. Not retreating to silos.

1. Every prime broker eventually runs into the same quiet problem: security and user experience are a seesaw. Push one side down and the other comes up. There is no configuration where both are maximized at once - only a point where the trade-off stops hurting too much.