Protocol Architecture
How Blot's smart contracts manage leveraged positions, cross-chain token flows, and fee distribution.
Overview
The Blot protocol is a system of smart contracts on Ink that manages leveraged token issuance backed by Nado perpetual futures, a cross-chain burn-to-mint token bridge from Ethereum, and an automated fee distribution pipeline to veVOID holders. The architecture is modular — each contract handles a single responsibility.
User │ ├─ mint/redeem ──→ Router ──→ Vault ──→ Nado (perps) │ │ │ ├──→ FeeCollector │ │ │ │ │ ├── 80% → veVOID Distributor │ │ └── 20% → Treasury │ │ │ └──→ Oracle (price feeds) │ ├─ burn FROTH ──→ FROTHBurner (Ethereum) ──→ BLOTMinter (Ink) │ ├─ stake BLOT ──→ DripsController ──→ Drips accrual │ └─ lock LP ────→ veVOID ──→ gauge voting, fee claims
Core Contracts — Leverage Token System
Router
The primary entry point for users. The Router accepts mint and redeem requests, validates parameters, enforces slippage protection, and routes collateral to the appropriate Vault. All user-facing interactions (mint, redeem) go through the Router.
Vault
Each leverage token has an associated Vault that holds collateral and manages the underlying Nado perpetual position. When a user mints, the Vault deposits margin into Nado and opens (or increases) a leveraged perp position. When a user redeems, the Vault reduces the position and returns USDT0.
The Vault is responsible for maintaining target leverage, tracking NAV, and reporting position health to the Rebalancer.
Rebalancer
Monitors all Vault positions and triggers rebalancing when effective leverage drifts beyond configured thresholds. The Rebalancer adjusts Nado position sizes — increasing exposure when leverage is too low (after profitable moves) and decreasing exposure when leverage is too high (after losses).
Operator Bot
An off-chain keeper that monitors positions continuously and calls the Rebalancer contract when thresholds are breached. The operator bot also handles emergency deleveraging during extreme market conditions and triggers circuit breakers when oracle prices deviate beyond safe bounds.
Oracle Module
Price feeds are sourced from decentralized oracles for NAV calculations and rebalance triggers. The Oracle module aggregates multiple price sources and includes circuit breakers — if the reported price deviates beyond a configured bound from the TWAP, minting and redemption are paused until prices stabilize.
Cross-Chain — FROTHBurner & BLOTMinter
The FROTH-to-BLOT conversion is a one-way cross-chain burn-to-mint system connecting Ethereum to Ink.
FROTHBurner (Ethereum)
Deployed on Ethereum mainnet. Users approve and burn FROTH tokens through this contract. The burn is permanent — FROTH is sent to the zero address. On successful burn, the contract emits a cross-chain message via LayerZero to the BLOTMinter on Ink.
BLOTMinter (Ink)
Receives the LayerZero message from FROTHBurner and mints the corresponding BLOT tokens to the user's address on Ink at a fixed 10,000:1 ratio. Processing takes approximately 4 minutes. There is no reverse path — BLOT cannot be converted back to FROTH.
Fee System
FeeCollector
All protocol fees (mint, redeem, management, rebalance spread) are routed to the FeeCollector contract. The FeeCollector holds accumulated fees in USDT0 and executes the 80/20 distribution split on a weekly epoch basis.
| Destination | Share | Description |
|---|---|---|
| veVOID Distributor | 80% | Distributed to veVOID holders proportional to balance |
| Treasury | 20% | Funds development, operations, and infrastructure |
veVOID Distributor
Handles the weekly distribution of protocol fees to veVOID holders. Each epoch, the Distributor snapshots veVOID balances and makes USDT0 claimable proportional to each holder's share. Unclaimed fees roll over to the next epoch.
Drips & Staking
DripsController
Manages the emission and accounting of Drips (non-transferable protocol points). The DripsController tracks accruals from all eligible activities — BLOT staking, LP provision on BlotSwap, leverage token minting and holding, and DEX trading. Emission rates are fixed by the protocol; distribution across activities is determined by veVOID gauge votes each epoch.
BLOT Staking
Single-sided BLOT staking for passive Drips accrual. No impermanent loss, no lockup period. Users deposit BLOT into the staking contract and earn Drips proportional to their stake and the current gauge weight allocated to staking.
Fee Structure
The protocol charges fees at several points:
| Fee | Rate | When |
|---|---|---|
| Mint fee | 0.1–0.3% | Minting new leverage tokens |
| Redeem fee | 0.1–0.3% | Burning tokens for USDT0 |
| Management fee | 2% annually | Accrued continuously on outstanding NAV |
| Rebalance spread | Variable | Captured during position rebalancing |
| DEX fee (protocol share) | 0.05% | Protocol portion of BlotSwap 0.3% swap fee |
Contract Addresses
Blot is deployed on the Ink network. Contract addresses will be published here upon mainnet launch.
// Ink Mainnet — BlotSwap DEX (Live)
BlotSwap Router: 0x34eFF4f2A69AC5B32a941e70D73F5b3aFFa319CA
BlotSwap Factory: 0x3644DeFa41A60a8DC4DeE8e317138E2446A54cCd
AggroKitty Router: 0x771fa05d3233D16df5cD2990ADac93a1340E11E7 // swap aggregator
DripsController: 0x0bbf6057126Dc9FFa4C541fF58D7Aa6C7A151e46
BLOT Token: 0x05cF7fD68D07bFE5157b19d899e2efdF3ab11C63
// Ink Mainnet — Leverage Protocol (Coming Soon)
Vault (ETH): 0x...
Vault (BTC): 0x...
Rebalancer: 0x...
Oracle: 0x...
FeeCollector: 0x...
VOID Token: 0x...
veVOID: 0x...
// Ethereum Mainnet
FROTHBurner: 0x05cF7fD68D07bFE5157b19d899e2efdF3ab11C63
FROTH Token: 0xDba6991eB60781D144b9B434fbf844aa0A73B91e