🏗️Architecture

DreamLend is built as a comprehensive decentralized P2P lending protocol on Somnia L1, featuring a multi-layered architecture designed for scalability, security, and exceptional user experience.

🌟 Architecture Overview

DreamLend follows a modern, layered architecture that separates concerns while maintaining seamless integration between components:

👥 User Layer - Lenders, Borrowers, and Liquidators
🖥️ Frontend Layer - Next.js application with React hooks
⛓️ Blockchain Layer - Smart contracts on Somnia L1
🔮 Oracle Layer - DIA Oracle V2 for price feeds
📊 Data Layer - The Graph subgraph for indexing

👥 User Layer

Participants

🏦 Lenders

Role: Provide capital for loans
Actions: Create loan offers, set terms, earn interest
Incentives: Interest income + $DREAM rewards

💰 Borrowers

Role: Access capital by providing collateral
Actions: Accept loans, manage collateral, repay loans
Incentives: Access to capital + $DREAM rewards

⚡ Liquidators

Role: Maintain protocol health
Actions: Monitor loans, execute liquidations
Incentives: Liquidation bonuses + $DREAM rewards

🖥️ Frontend Layer

Technology Stack

Framework: Next.js 14 with App Router
Styling: Tailwind CSS with custom components
State Management: React hooks and context
Web3 Integration: Reown AppKit + ethers.js
Data Fetching: Apollo Client for subgraph queries

Key Components

📱 Pages

Home: Protocol overview and statistics
Create: Loan offer creation interface
Offers: Browse available loan offers
My Loans: Manage active loans and offers
Analytics: Protocol metrics and insights
Rewards: $DREAM token rewards management

🎣 Custom Hooks

// Core protocol interaction
useP2PLending(); // Main contract interactions
useSubgraphQuery(); // Cached data fetching
useLivePriceComparison(); // Real-time price updates
useTokenBalance(); // Token balance management
useRewards(); // Reward system integration

🧩 UI Components

TransactionModal: Multi-step transaction progress
LoanHealthManager: Collateral management interface
PartialRepaymentManager: Flexible repayment options
TokenSelector: Token selection with balance display
QuickMintTokens: Testnet token minting

💳 Wallet Integration

Reown AppKit: Modern wallet connection
Multi-wallet Support: MetaMask, WalletConnect, etc.
Network Management: Automatic Somnia L1 configuration
Transaction Management: Gas estimation and confirmation

⛓️ Blockchain Layer (Somnia L1)

Network Specifications

Chain ID: 50312
Consensus: Proof of Stake
TPS: 400,000+
Block Time: ~1 second
Finality: Instant

Smart Contract Architecture

🏛️ DreamLend Contract

Address: 0xddDa4e2B1B8E6f06086F103dA6358E7aCbd020ec

Core Functions:

Loan offer creation and management
Collateral handling and validation
Interest calculation and accrual
Liquidation logic and execution
Partial repayment support

Security Features:

ReentrancyGuard protection
SafeERC20 token transfers
Oracle price validation
Access control modifiers

🎁 RewardsDistributor Contract

Address: 0x1ee1E4d84636FFDb8de6Dc684475C8f2Bdf5699c

Functions:

Reward accrual tracking
Distribution logic
Claim processing
Staking mechanisms

💎 DreamerToken Contract

Address: 0xf68F7B7FD9629f4990A5AB7181C2EE0E8b496B4B

Features:

ERC20 standard compliance
Mintable by authorized contracts
Burnable for deflationary mechanics
Governance capabilities (future)

🪙 Mock Tokens (Testnet)

MUSDT: Mock Tether USD (6 decimals)
MUSDC: Mock USD Coin (6 decimals)
MWBTC: Mock Wrapped Bitcoin (8 decimals)
MARB: Mock Arbitrum (18 decimals)
MSOL: Mock Solana (9 decimals)

🔮 Oracle Layer

DIA Oracle V2 Integration

Address: 0x9206296Ea3aEE3E6bdC07F7AaeF14DfCf33d865D

Price Feed Architecture

interface AggregatorV3Interface {
    function latestRoundData() external view returns (
        uint80 roundId,
        int256 answer,
        uint256 startedAt,
        uint256 updatedAt,
        uint80 answeredInRound
    );
}

Supported Price Feeds

USDT/USD: 0x67d2C2a87A17b7267a6DBb1A59575C0E9A1D1c3e
USDC/USD: 0x235266D5ca6f19F134421C49834C108b32C2124e
BTC/USD: 0x4803db1ca3A1DA49c3DB991e1c390321c20e1f21
ARB/USD: 0x74952812B6a9e4f826b2969C6D189c4425CBc19B
SOL/USD: 0xD5Ea6C434582F827303423dA21729bEa4F87D519

Security Features

Staleness Protection: Max 1-hour price age
Decimal Normalization: All prices in 8 decimals
Fallback Mechanisms: Multiple oracle sources
Circuit Breakers: Extreme price change protection

📊 Data Layer

The Graph Subgraph

Endpoint: https://api.subgraph.somnia.network/api/public/d5671b32-2846-489e-a577-e7d9702dd17b/subgraphs/dreamlend-graph/v0.0.3/

Indexed Entities

Loans: Complete loan lifecycle data
Users: Aggregated user statistics
ProtocolStats: Global protocol metrics
Events: All contract events with metadata

Caching Strategy

Stale-While-Revalidate: Serve cached data while fetching updates
Cache Duration: 3 minutes for loan data
Invalidation: Manual cache clearing after transactions
Optimization: Parallel queries and data prefetching

🔄 Data Flow Architecture

1. User Interaction Flow

sequenceDiagram
    participant U as User
    participant F as Frontend
    participant W as Wallet
    participant C as Contract
    participant O as Oracle
    participant S as Subgraph

    U->>F: Create Loan Offer
    F->>W: Request Transaction
    W->>C: Execute createLoanOffer()
    C->>O: Validate Prices
    C->>C: Store Loan Data
    C->>S: Emit Events
    S->>F: Update UI Data
    F->>U: Show Success

2. Price Update Flow

sequenceDiagram
    participant O as Oracle
    participant C as Contract
    participant F as Frontend
    participant U as User

    O->>O: Update Price Feeds
    F->>O: Fetch Latest Prices
    F->>C: Check Loan Health
    C->>O: Validate Price Staleness
    C->>F: Return Health Status
    F->>U: Display Health Updates

3. Liquidation Flow

sequenceDiagram
    participant L as Liquidator
    participant F as Frontend
    participant C as Contract
    participant O as Oracle
    participant R as Rewards

    L->>F: Monitor Unhealthy Loans
    F->>C: Check Liquidation Eligibility
    C->>O: Verify Current Prices
    L->>C: Execute Liquidation
    C->>R: Distribute Rewards
    C->>F: Update Loan Status

🛡️ Security Architecture

Smart Contract Security

Audited Code: Professional security audit completed
Formal Verification: Critical functions mathematically verified
Bug Bounty: Ongoing security incentive program
Upgrade Mechanisms: Controlled upgrade paths

Oracle Security

Multiple Sources: Redundant price feed providers
Staleness Checks: Automatic price age validation
Circuit Breakers: Extreme price change protection
Fallback Systems: Backup oracle integration

Frontend Security

Input Validation: Client and server-side validation
XSS Protection: Content Security Policy headers
HTTPS Only: Encrypted communication
Wallet Security: Secure key management practices

⚡ Performance Architecture

Scalability Features

Somnia L1: 400k+ TPS capacity
Efficient Contracts: Gas-optimized smart contracts
Batch Operations: Multiple actions in single transaction
State Optimization: Minimal on-chain storage

Frontend Performance

Next.js Optimization: Static generation and caching
Code Splitting: Lazy loading of components
Image Optimization: Automatic image compression
CDN Integration: Global content delivery

Data Performance

Subgraph Indexing: Fast blockchain data queries
Caching Layers: Multiple levels of data caching
Parallel Fetching: Concurrent API requests
Pagination: Efficient large dataset handling

🔮 Future Architecture

Planned Enhancements

Multi-chain Support: Cross-chain lending bridges
Advanced Oracles: Chainlink integration
Layer 2 Scaling: Additional scaling solutions
Mobile Apps: Native iOS and Android applications

Governance Integration

DAO Structure: Decentralized governance implementation
Proposal System: Community-driven protocol updates
Voting Mechanisms: $DREAM token-based voting
Treasury Management: Community-controlled funds

This architecture enables DreamLend to provide institutional-grade P2P lending with amazing user experience on the fastest blockchain.

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Last updated 2 months ago

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