Architecture

A deep dive into XyloNet's technical architecture, design decisions, and system components.

System Overview

XyloNet is a modular DeFi protocol built on Arc Network, consisting of four main components:

StableSwap AMM

Optimized for stablecoin swaps with minimal slippage using Curve's invariant algorithm.

CCTP Bridge

Native USDC bridging using Circle's Cross-Chain Transfer Protocol V2.

Liquidity Pools

Factory-deployed pools with LP token rewards and fee distribution.

ERC-4626 Vault

Tokenized vault for yield generation with standardized interface.

Component Architecture

XyloNet Protocol Architecture

Frontend

XyloRouter

Swap routing

XyloFactory

Pool deployment

XyloBridge

Contract deployed

XyloVault

Yield vault

USDC/EURC Pool

USDC/USYC Pool

Arc Network

L1 with native USDC gas

StableSwap Algorithm

XyloNet implements the StableSwap invariant, originally designed by Curve Finance. This algorithm is specifically optimized for trading assets that should maintain similar values.

// StableSwap Invariant

An^n * sum(x_i) + D = An^n * D + D^(n+1) / (n^n * prod(x_i))

Constant Product (xy=k)

Traditional AMMs:

• High slippage even for small trades
• Inefficient for stable pairs

StableSwap (XyloNet)

Curve-style AMM:

• Near-zero slippage at peg
• Optimized for stable assets

Amplification Factor

The amplification factor (A) determines how the curve behaves:

A = 0:Behaves like constant product (x*y=k)
A = ∞:Behaves like constant sum (x+y=k)
A = 100:XyloNet's default - optimal for stablecoins

CCTP Integration

⚡

Frontend Uses Circle Bridge Kit

For optimal user experience, XyloNet's frontend integrates directly with Circle Bridge Kitusing Fast Transfer mode (~30 seconds). The XyloBridge contract is deployed but not used by the frontend - it's available for developers who need programmatic access.

Circle's CCTP V2 protocol enables trustless native USDC transfers:

1.User initiates bridge via Bridge Kit
2.USDC is burned on source chain
3.Circle attestation (fast mode - ~seconds)
4.Circle relayer automatically mints on destination
✓Native USDC delivered to recipient (~30 sec total)

ERC-4626 Vault Standard

XyloVault implements the ERC-4626 tokenized vault standard for maximum composability:

deposit(assets, receiver) → shares

withdraw(assets, receiver, owner) → shares

redeem(shares, receiver, owner) → assets

totalAssets() → uint256

Security Model

Smart Contract Security

✓Reentrancy guards on all external calls
✓SafeMath for all arithmetic
✓Access control on admin functions
✓Input validation and bounds checking

Protocol Security

✓Non-custodial design
✓Circle-secured bridging (CCTP)
✓Battle-tested Curve algorithm
✓Transparent, open-source code