The Astro Protocol

Astro Protocol is a blockchain-based framework that enables the minting of stablecoins and synthetic assets, backed by on-chain collateral, stored and managed by processes developed within the AO compute environment. Unlike existing platforms, Astro introduces dynamic liquidation processes and stability modules to enhance system resilience and user trust.

Basic Concepts

Astro Protocol utilizes the Vault Contract as its core, where users lock in collateral to mint synthetic stablecoins. The protocol's design includes unique mechanisms for liquidation and stability, supported by real-time data from integrated oracle services. We also introduce a Protocol Hosted Wallet (PHW) and Wrapped Arweave (wAR) tokens, extending functionality and usability, making the protocol adaptable to a wide range of blockchain environments. Notice: In this document, the terms "contract" and "process" are used interchangeably. Within the AO compute environment, processes are analogous to contracts, and this terminology reflects their functional equivalence in the context of the Astro Protocol.

Formal Definitions

• Vault Contract (VC): Manages the deposits, withdrawals, and issuance of synthetic assets against locked collateral.

• Oracle Module (OM): Provides real-time pricing data by integrating feeds from sources like ChainLink, Pyth, and RedStone.

• Liquidation Module (LM): Activates to handle undercollateralized positions via direct user actions or systematic protocol-driven auctions.

• Stability Module (SM): Manages liquidity pools to mitigate systemic risks and ensure protocol stability.

• Protocol Hosted Wallet (PHW): A dedicated wallet system designed to hold and manage Arweave tokens securely within the protocol.

• Wrapped Arweave (wAR): A synthetic version of AR transferable within the aoComputer, designed for use within the Astro Protocol and other processes on the computer.

Astro Protocol Flow

Astro's Vault Contract is the entry point for users to interact with the protocol by depositing collateral and minting synthetic stablecoins. The Vault Contract holds the information needed to calculate the USD equivalent and USDA value and fees.

Let the following be defined:

• USD-equivalent value as $V$

• Quantity as $q$

• The price feed for the given currency identifier as $P$

• Collateralization factor as $c$

• Calculated fees as $F$

• Stability fee percentage as $s$

• Asset loan as $L$

• Amount of currency as $amount$

The current USD equivalent value of a currency is: $V(\text{currency}, q) = q \times P(\text{currency})$

The USDA loan value is: $L(\text{currency}, q, c) = \frac{V(\text{currency}, q)}{c}$

The current fee calculation is: $F(s, \text{amount}) = s \times \text{amount}$

Deposit and Mint

Users deposit collateral into the Vault Contract, which allows them to mint synthetic assets proportional to the value of their deposit, while maintaining a collateralization ratio deemed 'safe' by the protocol.

Liquidation Processes

In the event of market downturns affecting collateral values, the Liquidation Module is triggered to secure the protocol's assets and users' positions. The Contract is responsible for calculating collateralization ratios, liquidation bonuses, total redeemable collateral, and repayment amounts.

The collateralization ratio calculation is: $\text{ratio} = \frac{\text{Collateral Value in USD}}{\text{USDA Debt}}$

The liquidation bonus calculation is: $\text{Bonus} = \text{Liquidated Collateral} \times \frac{\text{Liquidation Bonus Percentage}}{100}$

The total redeemable collateral calculation is: $\text{Total Redeemable} = \text{Liquidated Collateral} + \text{Bonus}$

The repayment calculation is: $\text{Repayment} = \text{Debt} \times (1 + \text{Stability Fee})$