Foundry DeFi: Decentralized Stablecoin (DSC)

Minimal, over-collateralized algorithmic stablecoin system built with Foundry. The core contracts are:

• DSCEngine: collateral management, mint/burn logic, and liquidations
• DecentralizeStableCoin: ERC20 token with mint/burn controlled by the engine

The system targets a $1 peg with exogenous collateral (WETH/WBTC) and a minimum health factor of 2.0 (200%).

High-Level Design

• Users deposit approved collateral (WETH/WBTC) and mint DSC.
• Health factor is totalCollateralUsd / dscMinted.
• If a user drops below the minimum health factor, they can be liquidated.
• Liquidators burn DSC to cover debt and receive collateral plus a 10% bonus.

Contracts

src/DecentralizeStableCoin.sol

ERC20 token (DSC) with mint and burn restricted to the contract owner (the engine).

src/DSCEngine.sol

Core logic:

• depositCollateral, withdrawCollateral
• mintDsc, burnDsc
• depositAndMintDsc, withdrawCollateralAndBurnDsc
• liquidateUser
• price conversions using Chainlink price feeds

Key parameters:

• Minimum health factor: 2e18 (200%)
• Liquidation bonus: 10%
• Supported collateral: WETH, WBTC

Deployment

script/DeployDSCToken.s.sol deploys the token and engine, wires price feeds, and transfers token ownership to the engine.

script/HelperConfig.s.sol sets network configuration:

• Sepolia: uses live Chainlink feeds and token addresses
• Local Anvil: deploys mocks (ERC20 + MockV3Aggregator)

Tests

Unit tests: test/unit test/DscTokenTest.t.sol

• deposit, mint, burn, withdraw
• health factor checks
• liquidation paths

Invariant fuzzing:

• test/fuzz/Handler.t.sol
• test/fuzz/InvariantsTest.t.sol

Invariant: total system collateral (USD) must be greater than or equal to total DSC supply.

Getting Started

Install dependencies (already vendored under lib):

forge install

Build:

forge build

Run tests:

forge test

Run only invariants:

forge test --match-path test/fuzz/InvariantsTest.t.sol

Notes

• The system is intentionally minimal and does not include governance or fees.
• Collateral prices are pulled from Chainlink price feeds; local tests use mock feeds.