🏗️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 Architecture

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

1. 👥 User Layer - Lenders, Borrowers, and Liquidators

2. 🖥️ Frontend Layer - Next.js application with React hooks

3. ⛓️ Blockchain Layer - Smart contracts on Somnia L1

4. 🔮 Oracle Layer - DIA Oracle V2 for price feeds

5. 📊 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

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