I. Core Staking Mechanisms and Technical Architecture

I. Core Staking Mechanisms and Technical Architecture

LiquiSynth Protocol’s staking system is built on the Arbitrum Nitro stack, utilizing a modular smart contract design divided into the following core modules:

1. Staking Module

   • Function: Handles user asset staking, liquidity staking token (LSP-LP) generation, and reward distribution.

   • Technical Principles:

     • Tokenization of Staked Assets: Users stake assets (e.g., ARB) to mint 1:1 pegged liquidity staking tokens (e.g., stARB), compliant with the ERC-4626 standard (Tokenized Vaults).

     • Auto-Compounding: Staking rewards are automatically reinvested into protocols like GMX and Radiant via a Yield Aggregator, combining off-chain calculations and on-chain validation.

   • Key Code:

     // stARB Contract (ERC-4626 Implementation)
     contract StakedARB is ERC4626 {
         using SafeERC20 for IERC20;
     
         IERC20 public immutable asset; // ARB token contract
         address public yieldAggregator; // Yield aggregator address
     
         constructor(IERC20 _asset) ERC4626(_asset, "Staked ARB", "stARB") {
             asset = _asset;
         }
     
         // Stake ARB to mint stARB
         function deposit(uint256 assets, address receiver) public override returns (uint256 shares) {
             shares = super.deposit(assets, receiver);
             _reinvestToYieldAggregator(assets); // Auto-compounding
         }
     
         // Reward reinvestment logic
         function _reinvestToYieldAggregator(uint256 amount) internal {
             asset.safeTransfer(yieldAggregator, amount);
             IYieldAggregator(yieldAggregator).deposit(amount);
         }
     }

2. LP Staking and Synthetic Asset Minting Module

   • Function: Users stake LSP-ETH LP tokens to gain synthetic asset minting privileges.

   • Technical Principles:

     • LP Token Validation: Uses Uniswap V3 LP NFTs or Balancer weighted pool LP tokens, with liquidity value verified by oracles.

     • Over-Collateralization: Requires 150% collateralization (dynamic ratio) of LP value for synthetic asset minting, with real-time pricing via Chainlink oracles.

   • Key Code:

     // Synthetic Asset Minting Contract
     contract SyntheticMinter {
         using SafeMath for uint256;
     
         IChainlinkOracle public oracle; // Chainlink price oracle
         IERC20 public collateralToken;  // LSP-ETH LP token
         ISyntheticToken public synthUSD; // LSP-USD synthetic token
     
         // Collateral ratio = collateral value / synthetic value ≥ 150%
         uint256 public constant MIN_COLLATERAL_RATIO = 150; 
     
         // Mint synthetic assets
         function mintSynth(uint256 collateralAmount, uint256 synthAmount) external {
             uint256 collateralValue = oracle.getPrice(collateralToken) * collateralAmount;
             uint256 synthValue = oracle.getPrice(synthUSD) * synthAmount;
     
             require(
                 collateralValue >= synthValue * MIN_COLLATERAL_RATIO / 100,
                 "Insufficient collateral"
             );
     
             collateralToken.safeTransferFrom(msg.sender, address(this), collateralAmount);
             synthUSD.mint(msg.sender, synthAmount);
         }
     }