Smart Contract Logic
This feature allows users to leverage their future yield (APY) from DeFi protocols as a means to participate in prediction markets on Polyquest, without losing their underlying collateral. The conversion process is facilitated through smart contracts that manage permissions, calculations, conversions, and settlements.
Smart Contract Components
User Wallet Integration Contract
Function: Connects the user's DeFi protocol account to the Polyquest platform.
Logic:
The user initiates a connection request to link their wallet containing the collateralized assets and ongoing DeFi investment.
The contract verifies the user's APY, collateral, and yield-generating details through a DeFi protocol API (e.g., Jupiter, Scallop, etc.
The user grants permission for Polyquest to use their future APY rights.
APY Assessment Contract
Function: Calculates the user's projected future yield based on current APY rates and collateral value.
Logic:
Upon receiving permission, the contract fetches the user's APY and collateral data.
It calculates the future yield over a specified period (e.g., 7% APY on $100 collateral for one year).
The contract checks for changes in APY or collateral value periodically and adjusts the calculation accordingly.
Yield-to-Token Conversion Contract
Function: Converts the calculated future yield into USDC or other SPL tokens.
Logic:
The contract locks in the user's future yield by minting a tokenized representation of the yield (e.g., yUSDC).
It swaps the tokenized yield (yUSDC) to USDC or other SPL tokens via an integrated DEX API (e.g., Jupiter or Orca) using real-time data to optimize the swap.
A small service fee is deducted from the converted tokens before they are credited to the user’s Polyquest account.
Security: Ensures that the user’s principal collateral remains untouched and only future yield rights are exchanged.
APY Rights Settlement Contract
Function: Manages the settlement of APY rights once they mature or upon user request.
Logic:
If the quest outcome is favorable, the user's share of future yield (now tokenized and converted) is settled in USDC or $POLY.
If the user wishes to reclaim their yield before the end of the prediction period, they can trigger a settlement; the contract then calculates the available yield and completes the settlement, accounting for early withdrawal penalties if applicable.
Reinvestment Option: The contract allows for automatic reinvestment of yield into future quests or back into the user’s DeFi protocol to continue generating APY.
Security and Compliance Contracts
Function: Ensure all operations comply with platform rules and security standards.
Logic:
Multi-signature authorization for critical functions like withdrawals and settlements.
Automated audits and checks for anomalies or unauthorized actions.
Robust error handling and reversion mechanisms to protect user funds and data.
Workflow Summary
User connects their DeFi protocol account and grants permission for Polyquest to manage their future yield rights.
Smart contracts assess the current APY and collateral value to calculate the projected future yield.
Yield is converted to tokens (USDC or SPL) via a DEX integration, deducting minimal fees.
Users participate in prediction quests using their converted tokens as voting power.
Rewards or losses are settled automatically based on quest outcomes.
Future yield rights are managed and settled securely, with options for reinvestment or early withdrawal.
By leveraging smart contracts for the APY-to-Prediction Conversion feature, Polyquest ensures a transparent, secure, and user-friendly experience, allowing users to maximize their DeFi yields without risking their principal collateral. This feature not only enhances user engagement but also drives greater utility for $POLY and potentially attracts new projects looking to provide additional use cases for their tokens.
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