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Architecture

This document describes the technical architecture of Unbound’s delta-neutral vault.

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System Overview

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Smart Contracts

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Vault Contract (vault.cairo)

ERC-4626 tokenized vault with queue system: Storage: 
// Assets
underlying_asset: wBTC
collateral_asset: USDC
total_wbtc_held: u256  // wBTC kept for LONG exposure

// Queue system
deposit_queue_head/tail: u256
withdrawal_queue_head/tail: u256
pending_deposits: Map<u256, DepositRequest>
pending_withdrawals: Map<u256, WithdrawalRequest>
Key Functions: 
fn deposit(wbtc_amount, min_shares, avnu_calldata) -> request_id
fn request_withdraw(shares, min_assets) -> request_id
fn complete_withdrawal(request_id, avnu_calldata)
fn process_deposits(count)  // Operator only
fn mark_withdrawal_ready(request_id, usdc_amount)  // Operator only

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Backend Services

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DepositProcessor (deposit_processor.py)

Polls vault for pending deposits every 30 seconds:
  1. Reads deposit queue from contract
  2. For each unprocessed deposit:
    • Calls process_deposits() (mints shares, transfers USDC)
    • Deposits USDC to Extended
    • Opens SHORT position

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WithdrawalProcessor (withdrawal_processor.py)

Polls vault for pending withdrawals every 30 seconds:
  1. Detects PENDING withdrawals
  2. Calculates USDC value of shares
  3. Closes proportional position on Extended
  4. Requests USDC withdrawal from Extended
  5. Calls mark_withdrawal_ready() when USDC arrives

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PositionManager (position_manager.py)

Monitors position health every 60 seconds:
  • Checks funding rate
  • Closes positions if funding < -0.01%
  • Reopens when funding recovers
  • Monitors margin ratio for liquidation risk
Reports NAV to vault periodically:
  • Calculates: wBTC value + Extended equity
  • Signs NAV update
  • Submits to vault contract

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API Endpoints

EndpointMethodDescription
/api/statusGETVault status, NAV, delta
/api/apyGETFunding rate and APY estimates
/api/positionGETCurrent short position details
/api/queues/statusGETDeposit/withdrawal queue status
/api/funding-historyGETHistorical funding payments

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External Integrations

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Extended Exchange

Perpetual futures on Starknet:
  • Deposit contract: 0x062da0780fae...
  • Funding payments every hour
  • Formula: Position × Price × Rate

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AVNU Router

DEX aggregator for swaps:
  • Address: 0x04270219d365d6...
  • Used for wBTC ↔ USDC swaps on deposit/withdrawal

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Data Flow

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Deposit

User wBTC → Vault (keep 50%) → AVNU (swap 50%) → 
Backend → Extended deposit → Open SHORT

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Yield Generation

Every hour: Extended calculates funding
If rate > 0: Shorts receive payment → Equity grows

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Withdrawal

Close SHORT → Withdraw USDC from Extended →
Vault swaps to wBTC → Combine with vault wBTC → User

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Security Model

ComponentTrust Model
Vault ContractTrustless (on-chain, verified)
Operator BackendTrust to run strategy, cannot steal funds
Extended ExchangeCustody risk for USDC collateral
AVNU SwapsTrustless (atomic, slippage protected)