Core contracts

Market Factory

Responsible for permissionless market deployment.

Responsibilities:

• Validate market configuration against the Validation Matrix
• Deploy a new isolated LendingMarket instance
• Wire chosen adapters from the Adapter Registry
• Register market metadata
• Collect creation fees

Creation fee (immutable structure)

Fee structure is immutable so LPs can compute ROI with certainty and the protocol cannot change terms after capital is committed.

MarketConfig (conceptual)

struct MarketConfig {
    address lpAddress;
    address collateralAsset;
 
    address assetAdapter;
    address oracleAdapter;
    address complianceAdapter;   // address(0) if none
    address liquidationAdapter;
    address positionAdapter;
 
    address lendingAsset;        // must be in stablecoin allowlist
    uint256 ltvBasisPoints;
    uint256 aprBasisPoints;
    uint256 durationSeconds;
    uint256 gracePeriodHours;
    bool enableHealthFactor;
    uint256 healthFactorThreshold;
    bool enableCircuitBreaker;
    uint256 pauseThresholdBps;
    uint256 lookbackPeriodSeconds;
    uint256 resumeThresholdBps;
    uint256 cooldownSeconds;
}

LendingMarket (the lending engine)

Each market is its own isolated contract. It owns:

• Liquidity accounting (totalLiquidity, availableLiquidity, totalBorrowed)
• Loan state machine
• Circuit breaker
• Defensive adapter interaction

It never contains asset-type logic. Every asset-specific action is delegated to the market’s configured adapters.

Market status

enum MarketStatus {
    ACTIVE,
    PAUSED_VOLATILITY,
    PAUSED_STALE_ORACLE,
    PAUSED_MANUAL
}

Loan record

struct Loan {
    uint256 collateralAmount;
    uint256 principal;
    uint256 startTime;
    uint256 expiryTime;
    uint256 frozenInterestAt; // set in LIQUIDATION_CURE; 0 otherwise
    LoanStatus status;
}
 
enum LoanStatus {
    ACTIVE,
    GRACE_PERIOD,
    LIQUIDATION_CURE,      // reversible: holder can still repay
    LIQUIDATION_SETTLING,  // irreversible: async redemption submitted
    REPAID,
    LIQUIDATED
}

Origination sketch

1. If compliance adapter set → isEligible(msg.sender)
2. assetAdapter.isTransferable(...)
3. oracleAdapter.getPrice() — must be trusted and within sanity bounds
4. Compute max loan from LTV
5. Escrow collateral; verify balance delta matches requested amount
6. Mint position via position adapter
7. Transfer lending asset (stablecoin) to borrower

See Loan lifecycle for full state transitions.