Staking Mechanics

Deep dive into Pupas Protocol's AI-powered staking system

Understanding the technical mechanics behind Pupas Protocol helps you maximize returns and make informed staking decisions. Our system combines traditional LP token mechanics with AI-driven investment strategies.

Core Staking Process

Smart Contract Functions

Provide Function (Staking)

@Callable(i)
func provide() = {
  let pmt = i.payments[0]
  
  # Validate supported tokens (USDTu or USDT-ERC20)
  if (pmt.assetId != usdtId && pmt.assetId != usdtuId) then
    throw("please attach USDT: " + usdtIdStr + ", " + usdtuIdStr)
  else
    # Calculate protocol fee (0.3% of stake)
    let feeAmount = fraction(pmt.amount, MintFee, Scale6)
    let cleanAmount = pmt.amount - feeAmount
    
    # Calculate LP tokens to mint based on current price
    let lpAmount = fraction(cleanAmount, Scale6, tryGetInteger("global_lpPrice"))
    
    [
      Reissue(lpId, lpAmount, true),
      ScriptTransfer(i.caller, lpAmount, lpId),
      ScriptTransfer(FeeAddress, feeAmount, pmt.assetId)
    ]
}

Withdraw Function

@Callable(i)
func withdraw(assetIdStr: String, lendMarketStr: String) = {
  let pmt = i.payments[0]
  
  # Validate LP token attachment
  if (pmt.assetId != lpId) then
    throw("please attach LP: " + lpIdStr)
  else
    # Validate withdrawal asset (USDTu or USDT-ERC20 only)
    if (assetIdStr != usdtIdStr && assetIdStr != usdtuIdStr) then
      throw("you can only withdraw USDT: " + usdtIdStr + ", " + usdtuIdStr)
    else
      let lpAmount = pmt.amount
      
      # Calculate USDT amount based on current LP price
      let amountToWithdraw = fraction(lpAmount, tryGetInteger("global_lpPrice"), Scale6)
      
      [
        Burn(lpId, lpAmount),
        ScriptTransfer(i.caller, amountToWithdraw, fromBase58String(assetIdStr))
      ]
}

LP Token Price Mechanism

Price Update Frequency

Interval: Every 60 minutes (3,600 seconds)
Oracle Function: updateLpPrice() called by authorized address
Validation: Price change limits prevent manipulation
Transparency: All updates recorded on-chain

Oracle Price Update

@Callable(i)
func updateLpPrice(lpPrice: Int) = {
  let currentOraclePrice = valueOrElse(getInteger("global_lpPrice"), Scale6)
  let oracleChangeDelta = abs(max(
    fraction(currentOraclePrice, Scale6, lpPrice),
    fraction(lpPrice, Scale6, currentOraclePrice)
  ) - Scale6)
  
  # Validate caller authorization
  if (i.caller != this) then
    throw("available for self invoke only")
  else
    # Check volatility tolerance
    if (oracleChangeDelta > OracleVolatilityTolerance) then
      throw("max change for oracle is " + toString(fraction(OracleVolatilityTolerance / 100, Scale6)) + "%")
    else
      [IntegerEntry("global_lpPrice", lpPrice)]
}

Investment Flow

Fund Allocation Process

Pool Aggregation: Staked USDTu/USDT-ERC20 collected in main pool
AI Analysis: Investment agents analyze market conditions
Strategy Selection: AI choose optimal investment pools
Fund Deployment: Portion of pool allocated to selected strategies
Return Calculation: Profits/losses calculated and recorded
Price Update: New LP token price reflects pool performance and account balance

Investment Strategies

Lending Protocol Integration

func withdrawFromLend(amount: Int, assetIdStr: String, market: Address) = {
  let inv = invoke(market, "withdraw", [assetIdStr, [amount]], [])
  
  if (inv == inv) then [] 
  else throw("Strict value is not equal to itself.")
}

Risk Management System

Position Limits

# Risk management constants
let OracleVolatilityTolerance = 100000  # 10% max price change per update
let MintFee = 3000                      # 0.3% protocol fee
let Scale6 = 1000000                    # 6 decimal precision

Diversification Rules

Maximum volatility tolerance: 10% per price update
Protocol fee: 0.3% of stake amount
Automated position management via AI agents

Token Economics

LP Token Supply Management

Minting Process

# LP tokens minted = (stake amount - fee) / current LP price
let lpAmount = fraction(cleanAmount, Scale6, tryGetInteger("global_lpPrice"))

Burning Process

# USDT returned = LP tokens × current LP price
let amountToWithdraw = fraction(lpAmount, tryGetInteger("global_lpPrice"), Scale6)

Fee Structure

Protocol Fee (0.3% of stake)

# Applied at staking time, sent to treasury
let feeAmount = fraction(pmt.amount, MintFee, Scale6)  # 0.3% of initial stake
let cleanAmount = pmt.amount - feeAmount

# Send fee to treasury and mint LP tokens based on net stake
[
  ScriptTransfer(FeeAddress, feeAmount, pmt.assetId),
  Reissue(lpId, lpAmount, true),
  ScriptTransfer(i.caller, lpAmount, lpId)
]

Withdrawal Mechanics

Instant Withdrawal

No Lock Period: Withdraw anytime without penalties
Current Price: Always withdraw at latest LP price
Automated Processing: Smart contract handles transfers

LP Token Burning

# Burn LP tokens and transfer corresponding USDT amount
[
  Burn(lpId, lpAmount),
  ScriptTransfer(i.caller, amountToWithdraw, fromBase58String(assetIdStr))
]

Performance Tracking

Price Calculation

# Current LP price stored as integer with 6 decimal precision
let currentPrice = tryGetInteger("global_lpPrice")

# Helper function to safely get integer values
func tryGetInteger(key: String) = {
  match getInteger(this, key) {
    case a: Int => a
    case _ => 0
  }
}

Performance Metrics

LP Price History: Tracked via oracle updates
Total Value Locked: Sum of all staked assets
Active Strategies: Monitored by AI agents
Fee Collection: Protocol revenue tracking

Emergency Procedures

Access Control

# Only contract itself can update LP prices
if (i.caller != this) then
  throw("available for self invoke only")

Initialization Security

@Callable(i)
func init(usdtIdStr: String, usdtuIdStr: String) = {
  if (i.caller != this) then
    throw("available for self invoke only")
  else
    # Initialize protocol with supported tokens
    let newLp = Issue("PUPAS LP", "PUPAS AI TREASURY LP", 0, 6, true)
    let newLpId = toBase58String(calculateAssetId(newLp))
    
    [
      newLp,
      StringEntry("setup_lpId", newLpId),
      StringEntry("setup_usdtId", usdtIdStr),
      StringEntry("setup_usdtuId", usdtuIdStr)
    ]
}

Technical Deep Dive: For additional technical details, see our Protocol Features and LP Tokens guides.

Waves Blockchain Benefits

Transaction Efficiency

Low Fees: ~0.005 WAVES per transaction
Fast Finality: ~1 minute confirmation
Predictable Costs: No gas price volatility
RIDE Language: Secure, predictable smart contracts

Data Storage

# Protocol configuration stored on-chain
func tryGetString(key: String) = {
  match getString(this, key) {
    case a: String => a
    case _ => ""
  }
}

# Access stored values
let usdtIdStr = tryGetString("setup_usdtId")
let usdtuIdStr = valueOrElse(getString("setup_usdtuId"), "B45iYkZVC9cudR2yxrsJnrM75StiTrwphbfQ7xkyisip")
let lpIdStr = tryGetString("setup_lpId")

Monitoring and Alerts

Real-time Monitoring

Price Deviations: Oracle volatility tolerance enforced
Strategy Performance: AI agent monitoring
Liquidity Levels: Automated withdrawal processing
System Health: Smart contract state validation

Error Handling

# Comprehensive error messages for user guidance
if (pmt.assetId != usdtId && pmt.assetId != usdtuId) then
  throw("please attach USDT: " + usdtIdStr + ", " + usdtuIdStr)

# Volatility protection
if (oracleChangeDelta > OracleVolatilityTolerance) then
  throw("max change for oracle is " + toString(fraction(OracleVolatilityTolerance / 100, Scale6)) + "%")

Important: LP token prices can go down as well as up. AI strategies don't guarantee profits and may result in losses during adverse market conditions.

Next Steps

Understand LP Token mechanics in detail
Learn about Protocol Features to see AI capabilities
Explore Yield Sources for profit generation

PreviousGetting Started NextLP Tokens

Last updated 2 days ago