FAQ
GENERAL
What is Arenas?
Arenas is a decentralised liquidity protocol deployed on different networks. It enables users to supply digital assets to earn interest, and to borrow against their collateral in a transparent, non-custodial way.
How do I interact with Arenas?
You can connect your self-custodial wallet (such as MetaMask or WalletConnect) to the Arenas app, choose an asset, and supply or borrow directly through smart contracts.
Do I need a wallet to interact with Arenas?
Yes. Arenas is fully non-custodial - all actions (supply, withdraw, borrow, repay) happen directly from your wallet.
What is the cost of interacting with Arenas?
You pay standard network gas fees and, if borrowing, interest on the borrowed amount. There are no Arenas platform fees for normal lending operations.
How can I access Arenas?
Arenas is available through the Arenas App or any integrated dApp that interacts with the Arenas smart contracts.
How can I try out Arenas without using actual funds?
You can connect to the Arenas Testnet, where test tokens can be obtained from a faucet to simulate supplying and borrowing.
Can funds be frozen?
No. Arenas is non-custodial - only you have control of your assets. However, withdrawals can be temporarily limited if the liquidity pool is fully utilised (i.e., most assets are borrowed).
Why do I need to approve tokens?
Before interacting with Arenas, you must approve the protocol’s contracts to access specific tokens. This is a standard ERC-20 requirement for all DeFi protocols.
RISK
What are the risks involved in using Arenas?
Main risks include smart contract vulnerabilities, oracle errors, and extreme market volatility that may lead to liquidations.
What steps are taken to mitigate risks?
Arenas contracts are externally audited, use Chainlink oracles for price data, and rely on over-collateralisation to ensure solvency. Parameters such as loan-to-value (LTV) and liquidation thresholds are monitored and can be adjusted by protocol administrators.
SUPPLYING & EARNING
How do I supply?
Connect your wallet, select an asset, and click “Supply.” Your tokens are deposited into the liquidity pool and you receive aTokens that represent your position and accrue interest.
How much can I earn?
Earnings depend on market conditions - specifically the utilisation rate (how much of a pool is borrowed). The higher the borrowing demand, the higher the supply rate.
Are there limitations to supply?
Some reserves have supply caps to control liquidity risk.
Where are supplied tokens stored?
Supplied tokens are held by Arenas smart contracts on the blockchain. You receive aTokens in your wallet representing your share.
How do I withdraw?
Click “Withdraw” in the Arenas app. You can withdraw your supplied tokens (plus accrued interest) provided enough liquidity is available.
Can I opt-out of my asset being used as collateral?
Yes. You can disable “Use as Collateral” in the UI. The asset will continue earning interest but will not back any borrow positions.
BORROWING
How do I borrow?
Supply collateral, enable it as collateral, and select the asset you wish to borrow. Borrowing requires over-collateralisation.
How much can I borrow?
Your borrow limit is defined by the LTV ratio of your supplied assets. For example, an asset with a 75% LTV allows borrowing up to 75% of its value.
Why would I borrow instead of selling my assets?
Borrowing allows you to access liquidity while keeping exposure to your existing tokens (e.g., ETH, WSOMI).
How do I repay my borrow position?
You can repay any time using the borrowed asset or, in some cases, directly with your collateral via adapter contracts.
How much would I pay in interest?
Interest rates change dynamically based on pool utilisation. You can view current rates in the Arenas app.
When do I need to pay back the borrow position?
There is no fixed repayment date - positions remain open as long as the Health Factor stays above the liquidation threshold.
LIQUIDATIONS
What is Health Factor?
Health Factor measures how safe your borrow position is. If it drops below 1, part of your collateral can be liquidated.
What happens when my Health Factor is reduced?
If your Health Factor falls below the liquidation threshold, a portion of your collateral may be sold to repay your debt.
What are liquidations?
A mechanism that maintains the protocol’s solvency by selling under-collateralised positions.
How much is the liquidation penalty?
A small percentage (defined per reserve) is added on top of the repaid amount during liquidation.
Can you give an example?
If you borrowed 100 USDC against collateral worth $150, and its value dropped so your Health Factor fell below 1, part of your collateral would be sold to cover the 100 USDC plus the liquidation penalty.
What is a good Health Factor?
A value above 2 is considered safe. Closer to 1 means higher liquidation risk.
How can I avoid getting liquidated?
Monitor your Health Factor and maintain extra collateral, especially during high volatility.
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