Arcus Adds Stock and ETF Tokens, WETH as Collateral for Perpetual Futures
Arcus has expanded its perpetual futures margin system to accept nine tokenized stocks and exchange-traded funds (ETFs), along with wrapped Ether (WETH), as collateral. The change allows eligible traders to use existing token holdings to support perpetual positions, including short trades, without first selling those assets or converting them into the platform's settlement stablecoin.
Announced on Oct. 19, the feature is initially available to traders with more than $25 million in Arcus trading volume. The platform said access for other traders is expected to be enabled automatically over the coming weeks.
Which Assets Can Arcus Traders Use as Collateral?
The eligible assets include tokens representing the SPY and QQQ ETFs, as well as shares of Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Nvidia (NVDA), Meta Platforms (META) and Tesla (TSLA). Wrapped Ether, or WETH, is also supported.
Arcus was launched by dYdX Labs in collaboration with Robinhood Crypto. The platform combines tokenized stock trading and perpetual futures on Robinhood Chain.
How Arcus Uses Tokenized Assets to Support Margin
Previously, Arcus perpetual futures required traders to provide margin in $USDG, the protocol's settlement stablecoin. Under the new arrangement, eligible holdings can be transferred into a perpetuals account without being converted into $USDG.
Deposited $USDG is used first to meet margin requirements. If additional margin is needed, the system automatically creates a $USDG loan secured by the deposited tokens, according to Arcus documentation.
The loans support cross-margin positions only, meaning multiple positions share the collateral held in an account. Borrowed $USDG cannot be withdrawn or transferred to an isolated position, and variable interest accrues for as long as the loan remains outstanding.
Each of the ten eligible assets has an initial loan-to-value (LTV) ratio of 50%. This means every $1 of collateral can support up to $0.50 in borrowing for margin purposes. It does not represent the maximum leveraged position a trader can open.
Hedging and Basis Trading With Token Collateral
The new system allows traders to use token holdings to support opposing perpetual futures positions. For example, someone holding SPY tokens can use those assets as collateral for a short SPY perpetual, potentially creating a hedge without selling the underlying token position.
A similar approach can be used for basis trading, which pairs an asset holding with an opposing perpetual position and may seek to capture funding payments. Although the collateral feature removes the need to provide separate $USDG margin, borrowing introduces interest costs, and a hedge may not fully offset losses.
Arcus Collateral Limits and Liquidation Rules
Arcus's live lending parameters listed a $20,000 deposit limit for non-$USDG assets per account and a $2 million platform-wide deposit limit. Borrowing was capped at $10,000 per account.
The platform also imposed token-denominated supply limits of 10,000 units for each eligible stock or ETF token and 1,000 WETH across the platform. These restrictions apply alongside the aggregate dollar-denominated limits.
All ten collateral assets had a maintenance LTV of 60% in the published feed. Arcus assesses maintenance requirements and losses against the borrowing capacity supported by the collateral. According to its documentation, liquidation is triggered when an account breaches its maintenance capacity or its per-account loan limit.
During liquidation, the platform first cancels open orders and closes perpetual positions. Collateral is sold only if necessary to cover a remaining shortfall, with the live parameters valuing those sales at 99% of mark price. A decline in collateral value or losses on perpetual positions can both move an account closer to liquidation.
Restrictions and Outstanding Loan Obligations
Arcus's terms prohibit perpetual futures trading by users in the United States, Canada and the United Kingdom, among other restricted jurisdictions.
Closing a position does not automatically eliminate debt arising from realized losses, fees or interest. Any outstanding loan must still be repaid through $USDG deposits, subsequent trading profits or the sale of collateral.
By allowing tokenized equities, ETFs and WETH to support margin, Arcus is offering traders another way to fund cross-margin positions. However, the arrangement also introduces borrowing costs, collateral limits and liquidation risks that users must account for when managing their positions.
source: thedefiant
Writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.
Check out other news and articles on Google News
Disclaimer:
The articles on Hokanews are here to keep you updated on the latest buzz in crypto, tech, and beyond—but they’re not financial advice. We’re sharing info, trends, and insights, not telling you to buy, sell, or invest. Always do your own homework before making any money moves.
Hokanews isn’t responsible for any losses, gains, or chaos that might happen if you act on what you read here. Investment decisions should come from your own research—and, ideally, guidance from a qualified financial advisor. Remember: crypto and tech move fast, info changes in a blink, and while we aim for accuracy, we can’t promise it’s 100% complete or up-to-date.