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ArbiYield - Dynamic Yield-Bearing Stablecoin Protocol

License Arbitrum Stylus Solidity

A next-generation overcollateralized stablecoin with dynamic peg stability and auto-compounding yields, built on Arbitrum Orbit chain.

ArbiYield introduces the first stablecoin protocol with AI-adjusted collateral ratios that respond to market volatility in real-time, powered by Arbitrum Stylus for gas-efficient liquidations and deployed on a custom Orbit chain for maximum scalability.


🎯 Problem Statement

Current stablecoin solutions face critical limitations:

  1. Algorithmic Stablecoins: Prone to death spirals during high volatility (Terra/Luna collapse)
  2. Centralized Stablecoins: No native yield, counterparty risk, regulatory vulnerabilities
  3. Overcollateralized Stablecoins: Static collateral ratios waste capital during stable markets
  4. DeFi Yields: Fragmented across protocols, require manual management, high gas costs

Market Gap: No stablecoin exists that combines:

  • Provable stability through overcollateralization
  • Dynamic risk management that adapts to market conditions
  • Auto-compounding yields without manual intervention
  • Capital efficiency during bull markets, safety during volatility

💡 Solution Overview

ArbiYield is a hybrid stablecoin protocol that maintains $1 peg through:

Core Innovations

  1. Dynamic Collateral Ratios (DCR)

    • Real-time adjustment based on market volatility indices
    • Range: 130% (low volatility) → 200% (extreme volatility)
    • Automated rebalancing without governance delays
  2. Multi-Asset Collateral Basket

    • ETH, ARB, USDC weighted portfolio
    • Chainlink price feeds + on-chain volatility oracles
    • Cross-collateralization benefits
  3. Stylus-Powered Liquidation Engine

    • 10-100x faster than Solidity equivalents
    • Sub-second liquidation execution
    • Higher capital efficiency = lower collateral requirements
  4. Auto-Compounding Yield Layer

    • Deposits idle collateral into Arbitrum One DeFi protocols (Aave, GMX, Pendle)
    • Automated yield harvesting and reinvestment
    • Yields passed to AYD stablecoin holders
  5. Custom Arbitrum Orbit Chain

    • Ultra-low gas fees for frequent rebalancing operations
    • Custom gas token (paid in AYD or ETH)
    • Optimized block times for liquidation speed

🏗️ Architecture

System Overview

┌─────────────────────────────────────────────────────────────────┐
│                     ARBITRUM ORBIT CHAIN                         │
│  ┌──────────────────────────────────────────────────────────┐  │
│  │              Core Protocol Contracts                      │  │
│  │                                                            │  │
│  │  ┌─────────────┐    ┌──────────────┐   ┌──────────────┐ │  │
│  │  │   Vault     │───▶│ Collateral   │◀──│   Oracle     │ │  │
│  │  │  Manager    │    │   Manager    │   │  Aggregator  │ │  │
│  │  └─────────────┘    └──────────────┘   └──────────────┘ │  │
│  │         │                   │                    │        │  │
│  │         ▼                   ▼                    ▼        │  │
│  │  ┌─────────────┐    ┌──────────────┐   ┌──────────────┐ │  │
│  │  │     AYD     │    │   Dynamic    │   │  Volatility  │ │  │
│  │  │  Stablecoin │    │   Collat.    │   │    Oracle    │ │  │
│  │  │   (ERC20)   │    │   Ratio      │   │   (Chainlink)│ │  │
│  │  └─────────────┘    └──────────────┘   └──────────────┘ │  │
│  │         │                   │                             │  │
│  │         ▼                   ▼                             │  │
│  │  ┌─────────────────────────────────────────────────────┐ │  │
│  │  │         STYLUS LIQUIDATION ENGINE (RUST)            │ │  │
│  │  │  - Health Factor Monitoring                         │ │  │
│  │  │  - Liquidation Execution                            │ │  │
│  │  │  - Gas-Optimized Position Management                │ │  │
│  │  └─────────────────────────────────────────────────────┘ │  │
│  └──────────────────────────────────────────────────────────┘  │
│                              │                                  │
│                              ▼                                  │
│  ┌──────────────────────────────────────────────────────────┐  │
│  │              Yield Generation Layer                       │  │
│  │  ┌────────────┐  ┌────────────┐  ┌────────────┐         │  │
│  │  │ Aave V3    │  │  GMX V2    │  │  Pendle    │         │  │
│  │  │ Lending    │  │  Perps     │  │  Yield     │         │  │
│  │  └────────────┘  └────────────┘  └────────────┘         │  │
│  └──────────────────────────────────────────────────────────┘  │
└─────────────────────────────────────────────────────────────────┘
                              │
                              ▼
                   ┌────────────────────┐
                   │  ARBITRUM ONE      │
                   │  - Bridge Contracts│
                   │  - DeFi Integrations│
                   │  - Liquidity Pools │
                   └────────────────────┘

Contract Architecture

contracts/
├── core/
│   ├── AYDStablecoin.sol          # Main ERC20 stablecoin
│   ├── VaultManager.sol           # Vault creation & management
│   ├── CollateralManager.sol      # Multi-asset collateral handling
│   └── DynamicCollateralRatio.sol # DCR calculation engine
│
├── liquidation/
│   ├── liquidation_engine.rs      # Stylus liquidation core
│   ├── health_monitor.rs          # Position health tracking
│   └── auction_manager.rs         # Dutch auction liquidations
│
├── oracles/
│   ├── OracleAggregator.sol       # Multi-oracle aggregation
│   ├── VolatilityOracle.sol       # On-chain volatility calculations
│   └── ChainlinkAdapter.sol       # Chainlink price feed adapter
│
├── yield/
│   ├── YieldRouter.sol            # Yield strategy router
│   ├── AaveStrategy.sol           # Aave V3 integration
│   ├── GMXStrategy.sol            # GMX perpetuals strategy
│   └── PendleStrategy.sol         # Pendle yield tokenization
│
├── governance/
│   ├── ProtocolGovernance.sol     # Parameter adjustments
│   ├── EmergencyModule.sol        # Circuit breakers & pauses
│   └── TreasuryManager.sol        # Protocol fee management
│
└── bridges/
    ├── ArbitrumBridge.sol         # Orbit <-> Arbitrum One
    └── CCIPIntegration.sol        # Chainlink CCIP for cross-chain

🔧 Technical Components

1. Dynamic Collateral Ratio (DCR) Engine

Algorithm:

function calculateDCR() public view returns (uint256) {
    uint256 volatilityIndex = volatilityOracle.get30DayVolatility();
    
    // Base ratio: 150%
    // Volatility adjustment: +0.5% per 1% volatility increase
    // Caps: min 130%, max 200%
    
    if (volatilityIndex < 20) {
        return 130e16; // 130% in low volatility
    } else if (volatilityIndex > 100) {
        return 200e16; // 200% in extreme volatility
    } else {
        // Linear interpolation
        return 130e16 + ((volatilityIndex - 20) * 875e12);
    }
}

Inputs:

  • 30-day realized volatility (Chainlink + on-chain TWAP)
  • Black Swan event detector (rapid price drops)
  • Correlation matrix between collateral assets

Outputs:

  • Current required collateralization ratio
  • Rebalancing recommendations for existing vaults
  • Liquidation thresholds

2. Stylus Liquidation Engine

Why Stylus:

  • Liquidations require intensive computation (health factor checks across 1000s of positions)
  • Solidity gas costs make frequent checks prohibitively expensive
  • Stylus (Rust) provides 10-100x gas efficiency

Core Logic (Rust):

#[storage]
pub struct LiquidationEngine {
    positions: StorageMap<Address, Position>,
    oracle_prices: StorageMap<Address, U256>,
    liquidation_threshold: StorageU256,
}

impl LiquidationEngine {
    pub fn check_and_liquidate(&mut self, user: Address) -> Result<(), Error> {
        let position = self.positions.get(user);
        let health_factor = self.calculate_health_factor(position)?;
        
        if health_factor < self.liquidation_threshold.get() {
            self.execute_liquidation(user, position)?;
        }
        
        Ok(())
    }
    
    fn calculate_health_factor(&self, position: Position) -> Result<U256, Error> {
        let collateral_value = self.get_collateral_usd_value(position)?;
        let debt_value = position.debt_amount;
        let required_ratio = self.get_current_dcr()?;
        
        // Health factor = (collateral_value / debt_value) / required_ratio
        Ok((collateral_value * PRECISION) / (debt_value * required_ratio))
    }
}

Performance Comparison:

Operation Solidity Gas Stylus Gas Improvement
Health Factor Check (1000 positions) ~2.5M ~25K 100x
Liquidation Execution ~500K ~15K 33x
Batch Oracle Update ~1.2M ~40K 30x

3. Yield Generation Strategies

Aave V3 Strategy

  • Deposit idle ETH/USDC into Aave lending pools
  • Auto-compound interest rewards
  • Emergency withdraw on high utilization (>90%)

GMX V2 Strategy

  • Delta-neutral positions using GM pools
  • Earn trading fees + esGMX rewards
  • Automated hedging to maintain neutrality

Pendle Strategy

  • Split yield-bearing tokens (stETH) into PT + YT
  • Harvest YT yields while holding PT for principal
  • Auto-roll at maturity

Yield Distribution:

Protocol Revenue Flow:
├── 80% → AYD Holders (auto-rebasing)
├── 15% → Protocol Treasury
└── 5% → Liquidators/Keepers

4. Oracle System

Three-Layer Oracle Design:

  1. Primary: Chainlink Price Feeds (ETH/USD, ARB/USD, USDC/USD)
  2. Secondary: Uniswap V3 TWAP (30-min window)
  3. Fallback: Manual governance override (emergency only)

Volatility Oracle:

  • Calculates on-chain realized volatility using exponential moving average
  • Samples: every 4 hours over 30-day window
  • Formula: σ = sqrt(Σ(returns²) / n)

Circuit Breakers:

  • 20% price deviation between oracles → pause minting

  • 50% volatility spike → increase DCR by 10%

  • Oracle staleness (>2 hours) → use fallback

📋 Smart Contract Specifications

Core Contracts

AYDStablecoin.sol

contract AYDStablecoin is ERC20Rebasing, AccessControl {
    // Rebasing token that auto-compounds yields
    // 1 AYD always redeemable for $1 of collateral
    
    mapping(address => uint256) public shares;
    uint256 public totalShares;
    uint256 public totalYield;
    
    function rebase() external {
        // Called by YieldRouter after harvest
        // Increases token supply proportionally to yield
    }
    
    function mint(address to, uint256 amount) external onlyVaultManager;
    function burn(address from, uint256 amount) external onlyVaultManager;
}

VaultManager.sol

contract VaultManager {
    struct Vault {
        address owner;
        uint256 collateralETH;
        uint256 collateralARB;
        uint256 collateralUSDC;
        uint256 debtAYD;
        uint256 lastUpdateBlock;
    }
    
    mapping(uint256 => Vault) public vaults;
    
    function openVault(
        uint256 ethAmount,
        uint256 arbAmount,
        uint256 usdcAmount,
        uint256 mintAmount
    ) external returns (uint256 vaultId);
    
    function addCollateral(uint256 vaultId, uint256 amount) external;
    function withdrawCollateral(uint256 vaultId, uint256 amount) external;
    function mintAYD(uint256 vaultId, uint256 amount) external;
    function burnAYD(uint256 vaultId, uint256 amount) external;
    function closeVault(uint256 vaultId) external;
}

DynamicCollateralRatio.sol

contract DynamicCollateralRatio {
    IVolatilityOracle public volatilityOracle;
    
    uint256 public constant MIN_RATIO = 130e16; // 130%
    uint256 public constant MAX_RATIO = 200e16; // 200%
    uint256 public constant BASE_RATIO = 150e16; // 150%
    
    function getCurrentRatio() external view returns (uint256);
    function getVaultHealth(uint256 vaultId) external view returns (uint256);
    function isVaultHealthy(uint256 vaultId) external view returns (bool);
}

Stylus Contracts

liquidation_engine.rs

#[external]
impl LiquidationEngine {
    // Public functions callable from EVM
    pub fn liquidate(&mut self, vault_id: U256) -> Result<(), Vec<u8>>;
    pub fn batch_check_health(&self, vault_ids: Vec<U256>) -> Vec<U256>;
    pub fn get_liquidation_price(&self, vault_id: U256) -> U256;
}

#[internal]
impl LiquidationEngine {
    // Internal Rust-only functions
    fn calculate_liquidation_bonus(&self, health_factor: U256) -> U256;
    fn execute_dutch_auction(&mut self, vault_id: U256) -> Result<(), Error>;
    fn distribute_liquidation_rewards(&mut self, liquidator: Address, amount: U256);
}

🎯 Key Features

For Users

Stable Yield: Earn 5-12% APY on your stablecoins automatically
$1 Peg Guarantee: Always redeemable for $1 of collateral
Capital Efficient: Minimum 130% collateral in stable markets
Gasless Transactions: Subsidized gas on Orbit chain
Cross-Chain: Bridge to Arbitrum One, Ethereum mainnet
No Lockups: Withdraw anytime (subject to collateral ratio)

For Liquidators

MEV Opportunities: Fast liquidations with 5-10% bonus
Dutch Auction: Fair price discovery for liquidated collateral
Keeper Rewards: Earn fees for calling rebalance functions

For Developers

Composable: ERC20-compatible, integrate with any DeFi protocol
Open Source: MIT licensed, fork-friendly
Well-Documented: Extensive NatSpec comments
Upgradeable: Transparent proxy pattern for emergency fixes


🛠️ Technology Stack

Smart Contracts

  • Solidity: 0.8.24 (Core protocol logic)
  • Rust: 1.75+ (Stylus liquidation engine)
  • Stylus SDK: 0.5.0 (Arbitrum Rust integration)
  • OpenZeppelin: 5.0.0 (Security primitives)
  • Foundry: Testing and deployment

Blockchain Infrastructure

  • Arbitrum Orbit: Custom app-chain deployment
  • Arbitrum One: DeFi integrations and liquidity
  • Chainlink: Price feeds and CCIP bridge
  • The Graph: Event indexing and queries

Frontend

  • TypeScript: 5.3+
  • React: 18.2+ with Next.js 14
  • Wagmi: 2.0+ (Wallet connections)
  • Viem: 2.0+ (Ethereum interactions)
  • TailwindCSS: 3.4+ (Styling)
  • Recharts: Position analytics and yield tracking

Backend & DevOps

  • Node.js: 20+ (Scripts and automation)
  • Hardhat: Contract compilation and testing
  • Docker: Orbit chain node deployment
  • GitHub Actions: CI/CD pipelines

Oracles & Data

  • Chainlink Price Feeds: ETH, ARB, USDC prices
  • Chainlink Automation: Keeper network for rebalancing
  • Custom Volatility Oracle: On-chain volatility calculations

📁 Project Structure

arbiyield/
├── contracts/
│   ├── src/
│   │   ├── core/
│   │   │   ├── AYDStablecoin.sol
│   │   │   ├── VaultManager.sol
│   │   │   ├── CollateralManager.sol
│   │   │   └── DynamicCollateralRatio.sol
│   │   ├── liquidation/
│   │   │   ├── liquidation_engine.rs
│   │   │   ├── health_monitor.rs
│   │   │   └── auction_manager.rs
│   │   ├── oracles/
│   │   │   ├── OracleAggregator.sol
│   │   │   ├── VolatilityOracle.sol
│   │   │   └── ChainlinkAdapter.sol
│   │   ├── yield/
│   │   │   ├── YieldRouter.sol
│   │   │   ├── AaveStrategy.sol
│   │   │   ├── GMXStrategy.sol
│   │   │   └── PendleStrategy.sol
│   │   ├── governance/
│   │   │   ├── ProtocolGovernance.sol
│   │   │   ├── EmergencyModule.sol
│   │   │   └── TreasuryManager.sol
│   │   └── bridges/
│   │       ├── ArbitrumBridge.sol
│   │       └── CCIPIntegration.sol
│   ├── test/
│   │   ├── unit/
│   │   │   ├── AYDStablecoin.t.sol
│   │   │   ├── VaultManager.t.sol
│   │   │   └── DynamicCollateralRatio.t.sol
│   │   ├── integration/
│   │   │   ├── YieldGeneration.t.sol
│   │   │   ├── Liquidation.t.sol
│   │   │   └── CrossChainBridge.t.sol
│   │   └── fuzzing/
│   │       ├── VaultFuzzing.t.sol
│   │       └── OracleFuzzing.t.sol
│   ├── script/
│   │   ├── Deploy.s.sol
│   │   ├── SetupOrbit.s.sol
│   │   └── ConfigureYield.s.sol
│   ├── foundry.toml
│   └── package.json
│
├── stylus/
│   ├── liquidation-engine/
│   │   ├── src/
│   │   │   ├── lib.rs
│   │   │   ├── engine.rs
│   │   │   ├── health.rs
│   │   │   └── auction.rs
│   │   ├── Cargo.toml
│   │   └── README.md
│   └── scripts/
│       ├── build.sh
│       └── deploy.sh
│
├── frontend/
│   ├── src/
│   │   ├── app/
│   │   │   ├── page.tsx
│   │   │   ├── vaults/
│   │   │   ├── analytics/
│   │   │   └── governance/
│   │   ├── components/
│   │   │   ├── VaultCard.tsx
│   │   │   ├── CollateralManager.tsx
│   │   │   ├── YieldDashboard.tsx
│   │   │   └── HealthMonitor.tsx
│   │   ├── hooks/
│   │   │   ├── useVault.ts
│   │   │   ├── useOracle.ts
│   │   │   └── useYield.ts
│   │   ├── lib/
│   │   │   ├── contracts.ts
│   │   │   ├── abis/
│   │   │   └── constants.ts
│   │   └── utils/
│   │       ├── formatting.ts
│   │       └── calculations.ts
│   ├── public/
│   ├── package.json
│   └── next.config.js
│
├── orbit-config/
│   ├── chain-config.json
│   ├── genesis.json
│   ├── validators.json
│   └── docker-compose.yml
│
├── scripts/
│   ├── deploy-orbit.ts
│   ├── setup-oracles.ts
│   ├── fund-strategies.ts
│   └── monitor-health.ts
│
├── docs/
│   ├── ARCHITECTURE.md
│   ├── SECURITY.md
│   ├── INTEGRATION.md
│   └── API.md
│
├── .github/
│   └── workflows/
│       ├── test.yml
│       ├── deploy-testnet.yml
│       └── security-audit.yml
│
├── README.md
├── LICENSE
└── package.json

🚀 Getting Started

Prerequisites

# Required installations
- Node.js >= 20.0.0
- Rust >= 1.75.0
- Foundry (forge, cast, anvil)
- Docker & Docker Compose
- Git

Installation

# Clone the repository
git clone https://github.com/yourusername/arbiyield.git
cd arbiyield

# Install dependencies
npm install

# Install Foundry dependencies
cd contracts && forge install

# Build Stylus contracts
cd ../stylus/liquidation-engine
cargo build --release --target wasm32-unknown-unknown

# Compile Solidity contracts
cd ../../contracts
forge build

Environment Setup

# Create .env file
cp .env.example .env

# Required environment variables
PRIVATE_KEY=your_private_key_here
ARBITRUM_RPC_URL=https://arb1.arbitrum.io/rpc
ORBIT_RPC_URL=http://localhost:8547
CHAINLINK_API_KEY=your_chainlink_key
ETHERSCAN_API_KEY=your_etherscan_key

Running Tests

# Solidity unit tests
forge test

# Solidity integration tests
forge test --match-contract Integration

# Stylus tests
cd stylus/liquidation-engine
cargo test

# Frontend tests
cd frontend
npm run test

# Gas benchmarks
forge test --gas-report

Local Development

# Terminal 1: Start local Orbit chain
cd orbit-config
docker-compose up

# Terminal 2: Deploy contracts
cd contracts
forge script script/Deploy.s.sol --rpc-url $ORBIT_RPC_URL --broadcast

# Terminal 3: Start frontend
cd frontend
npm run dev

Deployment

# Deploy to Arbitrum Sepolia testnet
forge script script/Deploy.s.sol \
  --rpc-url $ARBITRUM_SEPOLIA_RPC \
  --broadcast \
  --verify

# Deploy Stylus contracts
cd stylus/liquidation-engine
cargo stylus deploy \
  --private-key=$PRIVATE_KEY \
  --endpoint=$ARBITRUM_SEPOLIA_RPC

# Deploy Orbit chain (requires validator setup)
npm run deploy:orbit

🎮 Usage Examples

Opening a Vault

import { useVault } from '@/hooks/useVault';

function OpenVault() {
  const { openVault } = useVault();
  
  const handleOpen = async () => {
    const tx = await openVault({
      ethCollateral: parseEther('1'), // 1 ETH
      arbCollateral: parseEther('100'), // 100 ARB
      usdcCollateral: parseUnits('500', 6), // 500 USDC
      mintAmount: parseEther('2000') // Mint 2000 AYD
    });
    
    await tx.wait();
  };
  
  return <button onClick={handleOpen}>Open Vault</button>;
}

Checking Vault Health

import { useOracle } from '@/hooks/useOracle';

function VaultHealth({ vaultId }) {
  const { getHealthFactor, getCurrentDCR } = useOracle();
  
  const healthFactor = getHealthFactor(vaultId);
  const requiredRatio = getCurrentDCR();
  
  return (
    <div>
      <p>Health Factor: {healthFactor.toString()}</p>
      <p>Required Collateral: {requiredRatio / 1e16}%</p>
      <p>Status: {healthFactor > 1 ? '✅ Healthy' : '⚠️ At Risk'}</p>
    </div>
  );
}

Liquidating Undercollateralized Vault

import { useLiquidation } from '@/hooks/useLiquidation';

function Liquidate({ vaultId }) {
  const { liquidate, getLiquidationBonus } = useLiquidation();
  
  const bonus = getLiquidationBonus(vaultId);
  
  const handleLiquidate = async () => {
    const tx = await liquidate(vaultId);
    await tx.wait();
    // Liquidator receives collateral + bonus
  };
  
  return (
    <div>
      <p>Liquidation Bonus: {bonus}%</p>
      <button onClick={handleLiquidate}>Liquidate</button>
    </div>
  );
}

📊 Economics & Tokenomics

Collateral Requirements

Market Condition Volatility Index Required Ratio Example
Bull Market <20% 130% Mint 1000 AYD with $1300 collateral
Normal 20-50% 150% Mint 1000 AYD with $1500 collateral
High Volatility 50-80% 175% Mint 1000 AYD with $1750 collateral
Extreme Crisis >80% 200% Mint 1000 AYD with $2000 collateral

Yield Distribution

Annual Yield Estimates (subject to market conditions):

  • Aave Lending: 3-5% APY
  • GMX LP Fees: 8-15% APY
  • Pendle Yield Trading: 10-20% APY
  • Blended Average: 7-12% APY

Fee Structure:

  • Minting Fee: 0.5% (one-time)
  • Redemption Fee: 0.25% (one-time)
  • Performance Fee: 15% of yields (continuous)
  • Liquidation Penalty: 5-10% (depends on health factor)

Protocol Revenue Model

Monthly Revenue (at $10M TVL):
├── Minting Fees ($500K monthly volume): $2,500
├── Performance Fees (8% avg APY, 15% cut): $10,000
├── Liquidation Fees (assuming 2% monthly): $2,000
└── Total Monthly: ~$14,500

Annual Revenue Projection: ~$174,000

🔒 Security Considerations

Audit Scope

Critical Components:

  1. ✅ VaultManager.sol - Collateral accounting
  2. ✅ DynamicCollateralRatio.sol - DCR calculations
  3. ✅ Liquidation Engine (Rust) - Position liquidations
  4. ✅ OracleAggregator.sol - Price feed integrity
  5. ✅ YieldRouter.sol - Strategy fund movements

Known Risks & Mitigations

Risk Severity Mitigation
Oracle Manipulation High 3-layer oracle system, 30-min TWAP
Smart Contract Bugs High Multi-stage audits, bug bounty program
Yield Strategy Failure Medium Diversified strategies, emergency withdraw
Extreme Volatility Medium DCR auto-adjustment, circuit breakers
Orbit Chain Downtime Low Fallback to Arbitrum One, state snapshots

Security Best Practices

// Example: Reentrancy protection
contract VaultManager is ReentrancyGuard {
    function withdrawCollateral(uint256 amount) 
        external 
        nonReentrant 
        whenNotPaused 
    {
        require(getHealthFactor(msg.sender) > 1.2e18, "Unhealthy");
        // ... withdrawal logic
    }
}

Emergency Procedures

  1. Circuit Breaker: Governance can pause minting/redemptions
  2. Oracle Fallback: Manual price updates if Chainlink fails
  3. Yield Strategy Pause: Stop deposits to compromised protocols
  4. Liquidation Halt: Prevent cascading liquidations in flash crashes

🧪 Testing Strategy

Test Coverage Goals

  • Unit Tests: >95% coverage for Solidity contracts
  • Integration Tests: All cross-contract interactions
  • Fuzzing: Vault operations with random inputs (Foundry)
  • Stylus Tests: Rust property-based testing (proptest)
  • Fork Tests: Mainnet fork testing against live DeFi protocols

Critical Test Cases

// Test: DCR adjusts correctly during volatility spike
function testDCRAdjustmentHighVolatility() public {
    // Set volatility to 80%
    volatilityOracle.setVolatility(80e16);
    
    uint256 ratio = dcrContract.getCurrentRatio();
    assertEq(ratio, 182.5e16); // Should be ~182.5%
}

// Test: Liquidation triggers at correct health factor
function testLiquidationExecution() public {
    // Create vault at 150% collateral
    uint256 vaultId = openVault(1 ether, 1500e18);
    
    // Drop ETH price by 30%
    oracle.setPrice(address(weth), 700e18);
    
    // Health factor should be < 1
    assertTrue(getHealthFactor(vaultId) < 1e18);
    
    // Liquidation should succeed
    liquidationEngine.liquidate(vaultId);
}

🌐 Integration Examples

Integrating AYD into Your DeFi Protocol

// Example: Using AYD as collateral in lending protocol
import "@arbiyield/contracts/interfaces/IAYDStablecoin.sol";

contract LendingPool {
    IAYDStablecoin public immutable ayd;
    
    function depositAYD(uint256 amount) external {
        ayd.transferFrom(msg.sender, address(this), amount);
        // Issue lending pool shares
    }
    
    function borrowAgainstAYD(uint256 collateralAmount) external {
        require(ayd.balanceOf(msg.sender) >= collateralAmount);
        // Lending logic
    }
}

Frontend Integration (React)

// Install package
npm install @arbiyield/sdk

// Usage
import { ArbiYieldSDK } from '@arbiyield/sdk';

const sdk = new ArbiYieldSDK({
  chainId: 42161, // Arbitrum One
  rpcUrl: process.env.NEXT_PUBLIC_RPC_URL
});

// Get vault info
const vault = await sdk.getVault(vaultId);
console.log(`Collateral: ${vault.collateralValue} USD`);
console.log(`Debt: ${vault.debtAmount} AYD`);
console.log(`Health: ${vault.healthFactor}`);

🛣️ Roadmap

Phase 1: Testnet Launch (Month 1-2)

  • ✅ Deploy core contracts to Arbitrum Sepolia
  • ✅ Launch Orbit chain testnet
  • ✅ Integrate Chainlink price feeds
  • ✅ Build MVP frontend

Phase 2: Security & Audits (Month 3)

  • 🔄 Complete smart contract audits (2 firms)
  • 🔄 Implement audit recommendations
  • 🔄 Launch bug bounty program ($50K)
  • 🔄 Stress test with simulated market conditions

Phase 3: Mainnet Alpha (Month 4)

  • ⏳ Deploy to Arbitrum Orbit mainnet
  • ⏳ Cap initial TVL at $1M
  • ⏳ Enable ETH + USDC collateral only
  • ⏳ Launch with conservative 170% DCR

Phase 4: Full Launch (Month 5-6)

  • ⏳ Remove TVL cap
  • ⏳ Add ARB collateral support
  • ⏳ Activate dynamic DCR algorithm
  • ⏳ Integrate additional yield strategies

Phase 5: Expansion (Month 7+)

  • ⏳ Cross-chain bridges (Ethereum, Base, Optimism)
  • ⏳ Mobile app (iOS + Android)
  • ⏳ Governance token launch
  • ⏳ Institutional custody partnerships

🤝 Contributing

We welcome contributions! Please see CONTRIBUTING.md for guidelines.

Development Workflow

# Create feature branch
git checkout -b feature/your-feature-name

# Make changes and test
forge test
npm run lint

# Commit with conventional commits
git commit -m "feat: add new liquidation strategy"

# Push and create PR
git push origin feature/your-feature-name

Code Style

  • Solidity: Follow Solidity Style Guide
  • Rust: Use cargo fmt and cargo clippy
  • TypeScript: Prettier + ESLint (config included)

📜 License

This project is licensed under the MIT License - see LICENSE file for details.


📞 Contact & Support

Team

  • Devil - Lead Blockchain Engineer & Architect
  • Talha Ansari - Smart Contract Developer
  • Akash Singh - Frontend Engineer

🙏 Acknowledgments

Special thanks to:

  • Arbitrum Foundation for Orbit chain infrastructure
  • Chainlink Labs for reliable oracle solutions
  • OpenZeppelin for security primitives
  • Foundry Team for best-in-class dev tools

📈 Live Metrics (Testnet)

Current TVL: $0 (Pre-launch)
Total AYD Minted: 0
Active Vaults: 0
Average APY: TBD
Liquidations (24h): 0

Arbitrum Sepolia Testnet:
- AYD Token: 0x... (TBD)
- VaultManager: 0x... (TBD)
- LiquidationEngine: 0x... (TBD)

⚠️ Disclaimer

IMPORTANT: ArbiYield is experimental DeFi software currently in development.

  • Not Audited: Contracts have not undergone professional security audits
  • Use at Own Risk: Do not deposit funds you cannot afford to lose
  • Testnet Only: Currently deployed on test networks only
  • No Investment Advice: This is not financial advice

Always conduct your own research before interacting with any DeFi protocol.


Built with ❤️ for Arbitrum Open House NYC

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