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Smart Contract Architecture

Here you will find descriptions of the smart contract interfaces of every smart contract in the Synthetix system. These documents go a bit further than the code does. These documents try to emphasise the reasons behind the architecture, specifically highlighting interactions between system components. The technical aspects of the system are also discussed together with the details of the incentive mechanism, and with links back to governance processes.

Developers wishing to understand Synthetix code and the tradeoffs within it will be well-advised to read these documents alongside the Solidity itself.

The addresses of currently-deployed contract instances are available in the Addresses section.

The deployment of contracts is managed by the Publisher section.

Version

This documentation is current as of commit TODO.

Overview

The Synthetix system is composed of a number of core contract complexes, and several auxiliary contracts that enhance token liquidity and general system functionality. These on-chain entities and how they communicate is reflected in the following high-level diagram.

Contract architecture graph

The oracle, Synthetix, synths, inflationary supply, and fee pool elements comprise the core of the system. The arbitrage and depot contracts are supporting components which, while they do not alter the fundamental behaviour of system tokens, ensure the economic health of the system. They do this by making sure that SNX and synths flow freely through markets like Uniswap and Mintr, improving liquidity and encouraging prices to be close to their theoretically correct values.

Each of the elements in this graph may be a complex composed of several contracts, as described below. Some relatively unimportant links have been omitted, but more detailed descriptions are available at the documentation pages for each specific contract.

Core Components


Synthetix

Responsibilities

_ Implements the SNX token. _ Tracks operational synths. _ Issues and burns synths. _ Exchanges between synth flavours. _ Mints the inflationary supply. _ Maintains the system debt ledger.

Synthetix contract communicates with synths to manage their supply, as well as the fee pool to remit fees when synth exchanges occur. In order to properly convert between synths, and to understand value of debt induced by minting tokens, the Synthetix contract retrieves current token prices from the oracle. This contract also communicates with the inflationary supply complex to mint the correct quantity when expanding the supply of SNX, and to distribute the new tokens appropriately.

Along with the debt ledger, which is a time series history of the overall value of the synthetix ecosystem, issuance data for the current fee period is updated whenever synths are issued or burnt. This complex is also responsible for pushing historical issuance information to the fee pool, so that as fee periods roll over, a record of what portion of the total system debt is owned by different issuers is known when computing their fee entitlements.

Constituent Contracts

Contract Description
Synthetix The main token contract.
SynthetixState An auxiliary state contract that sits alongside Synthetix, which tracks current issuer data and the debt ledger.
Issuer An auxiliary helper contract that performs the issuing and burning functionality.
Exchanger An auxiliary helper contract that performs the exchance and settle functionality.

Synth

Responsibilities

_ Implements all synth tokens. _ Liquidates frozen inverse synths.

Many instances of the Synth token contract are deployed, one for each flavour of synth, including inverse synths. Since they run the same logic, synths are largely interchangeable, being distinguished only by their names and prices.

Synths implement their own issuance and burning logic, but only the Synthetix and fee pool contracts may invoke them. The Synthetix contract uses these functions for issuance and burning by stakers, while the fee pool uses them to burn fees at the fee address and issue them to the claimers address.

Purgeable Synths also retrieve prices from the oracle at the time of their liquidation to check if the value of their circulating supply is low enough to liquidate.

Constituent Contracts

Contract Description
Synth The base ERC20 token contract comprising most of the behaviour of all synths. Each synth has an associated proxy and token state contract.
PurgeableSynth A synth contract that can be liquidated at the end of its life, if its supply is low enough or it is a frozen inverse synth.

Fee Pool

Responsibilities

_ Computes fee entitlements based on the current exchange fee rate and incentive structure, to incentivise users to keep the system operating correctly. _ Defines the boundaries of recent fee periods, tracking the fees and rewards to be distributed in each one. _ Allows anyone to roll over to the next fee period once the current one has closed. _ Accumulates synth exchange fees, holding them as a pool of sUSD. _ Directs the RewardEscrow to escrow inflationary SNX rewards for eligible issuers. _ Stores and manages the details of the last several mint/burn events for each account, in order to compute the quantity of fees and rewards they are owed for the past several fee periods. * Allows issuers (or their delegated hot wallets) to claim any fees and rewards owed to them.

Since the collection of exchange fees on synths is mediated through the Synthetix.exchange function, the fee pool interacts closely with both the Synthetix and Synth contracts.

The Synthetix contract informs the fee pool when fees are collected, and it is allowed to append historic issuance records to its own account issuance ledger. The fee pool mostly interacts with other system components through Synthetix. For example, it only interacts with the oracle through the Synthetix contract, in order to issue fees and rewards. It also retrieves other data from there, like debt ledger information, issuance and collateralisation ratios, and the addresses of synth contracts.

As the fee pool is responsible for computing the quantity of both exchange fees and inflationary rewards that issuers are entitled to, it also communicates with the inflationary supply complex. In particular, the RewardsDistribution contract is allowed to set the level of inflationary rewards to be distributed through the fee pool, which then disburses them by adding new vesting schedule entries in the RewardEscrow contract.

Constituent Contracts

Contract Description
FeePool The main contract responsible for computing and storing the level of fees and rewards issuers are entitled to.
FeePoolState Stores a limited history of issuance data per user.
FeePoolEternalStorage Stores fee withdrawal times for each address.
DelegateApprovals Allows addresses to delegate to others the right to claim fees on their behalf.

Inflationary Supply

Responsibilities

_ Defines the schedule according to which SNX tokens are generated from the inflationary supply. _ Tracks for each year how many inflationary tokens have been minted so far, and how many remain. _ Distributes inflationary rewards to different recipients in the proportions specified by the protocol; that is for staking versus providing Uniswap liquidity. _ Holds the minted inflationary rewards in escrow for a year after they are claimed. * Holds and distributes the escrowed tokens from the original token sale.

The inflationary supply complex is concerned with controlling the flow of new SNX tokens being injected into the market. In this capacity it communicates with the Synthetix contract. The actual fraction of the weekly SNX rewards that a particular account is entitled to claim is computed by the fee pool, which is able to direct the RewardEscrow and RewardsDistribution contracts as to how they should distribute the new tokens.

Constituent Contracts

Contract Description
SupplySchedule Determines the rate that inflationary SNX tokens are released.
RewardEscrow Receives inflationary SNX rewards to be distributed after a year escrow.
RewardsDistribution Apportions designated quantities of inflationary rewards to the RewardEscrow contract.
SynthetixEscrow Holds the escrowed balances of SNX from the original token sale.
EscrowChecker Augments the SynthetixEscrow contract with a function for dApps to conveniently query it.

Oracle

Responsibilities

_ Updates, stores, and distributes up-to-date token prices relevant to the system. _ Computes the prices of inverse synths. _ Disables exchange functionality if prices are not fresh. _ Detects and mitigates attempted front-running, for example by locking exchanges while prices are being updated, or activating the exchange protection circuit. _ Provides functionality to perform exchange rate conversions between synth flavours.

The on-chain manifestation of the oracle is the ExchangeRates contract, whose stored prices it frequently updates. The primary user of these prices is the Synthetix contract, which needs them to calculate debt allocations when issuing and burning synths, and to determine the correct quantity of synths when performing an exchange of one flavour for another.

It is also used by some other contracts, such as the Depot and PurgeableSynth contracts.

Constituent Contracts

Contract Description
Oracle The oracle is responsible for collecting and updating all token prices known to the Synthetix system. Although it is not a contract, it controls a known Ethereum address from which price updates are sent to the ExchangeRates contract.
ExchangeRates The Synthetix exchange rates contract which receives token prices from the oracle, and supplies them to all contracts that need it.

Token Circulation


Depot

Responsibilities

  • TODO (also flesh out the description here)

The Depot is a vendor contract that allows users to exchange their ETH for sUSD or SNX, or their sUSD for SNX. It also allows users to deposit Synths to be sold in exchange for ETH.

The depot has its own dedicated oracle, and all exchanges are performed at the current market prices, assuming sUSD is priced at one dollar.


Infrastructure


AddressResolver

Responsibilities

_ Tracks the latest instances of all contracts required in the Synthetix system, allowing them to be queried by a bytes32 name

Each contract which inherits (or mixes in when considering multiple inheritance) MixinResolver will have access to the AddressResolver contract, and can lookup at transaction time where it's sibling contracts are located.

Proxy

Responsibilities

_ Provides static addresses for contracts where the underlying logic can be upgraded. _ Provides the interface that allows contracts to operate beneath a proxy.

Each contract which uses a proxy must inherit from Proxyable. Function calls are forwarded from the proxy to the proxyable base, while return data and event information travels the other way. Ultimately most contracts should communicate with one another by proxy. See SIP-16 for more discussion.

The Synthetix, FeePool, and all Synth contracts exist behind their own individual proxies.

Contracts

Contract Description
Proxy The Synthetix proxy contract.
ProxyERC20 A proxy contract which explicitly supports the ERC20 interface.
Proxyable An abstract base contract designed to work with the Synthetix proxy.

Utilities

These contracts mostly are not deployed on their own, but provide functionality inherited by other contracts already listed.

Contracts

Contract Description
EternalStorage A persistent/unstructured smart contract storage pattern.
ExternStateToken A partial ERC20 token contact with an external state, which all tokens in Synthetix are built upon.
LimitedSetup A contract which can disable functions a set time after deployment.
Migrations Truffle migrations contract.
MixinResolver A mixin to give the inheriter access the AddressResolver instance.
Owned A contract with a distinct owner who can have special privileges.
Pausable A contract whose operations can be paused by its owner.
SafeDecimalMath A library for performing fixed point arithmetic at two different precision levels.
SafeMath OpenZeppelin guarded arithmentic library, used by SafeDecimalMath and others.
SelfDestructible A contract that can be self destructed by its owner after a delay.
State An external state contract which can restrict its fields to be modifiable only by a particular contract address.
TokenState A state contract to be used with ExternStateToken to store balances.