Technical Architecture

Foundation utilizes a Hub-and-Spoke architecture designed for maximum capital efficiency and security.

System Components

Component	Role
The Hub	Foundation Vault — immutable accounting engine
The Spokes	Yield Strategies — ERC4626 tokenized vaults (PrimeUSD, ApolloUSD, OrdUSD)
The Connector	Rebalance Router — enables atomic swaps between strategies

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Core Components

1. Prime Manager

The central orchestrator of the Foundation protocol.

Responsibility	Description
Minting Authority	Only contract authorized to mint or burn USD'
Permission Management	Controls strategy whitelisting and access
Oracle Integration	Manages price feeds for NAV calculations
Minting Limits	Enforces per-strategy and global caps

2. Foundation Vault (Accounting Engine)

The Vault holds all physical collateral and maintains the global solvency mapping.

Feature	Implementation
Collateral Custody	USDC, USDT, RWA tokens, LP tokens
Ledger Mapping	Real-time Asset ↔ Liability tracking
Virtual Settlement	Internal ledger updates instead of token transfers

Key Innovation: When a user swaps strategies, the Vault updates its internal ledger—crediting one strategy and debiting another—without requiring gas-heavy token transfers.

3. Rebalance Router

Enables atomic movement of value between strategies.

Function	Description
NAV Calculation	Queries oracles to determine fair share value
Burn/Mint Cycle	Executes redemption and deposit in one transaction
Slippage Protection	Enforces minSharesOut parameter

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Transaction Flow

sequenceDiagram
    participant User
    participant Router as Rebalance Router
    participant StratA as Source Strategy
    participant StratB as Destination Strategy
    participant Vault as Foundation Vault

    User->>Router: swapStrategies(sharesIn, minSharesOut)
    
    rect rgb(25, 30, 40)
        Note right of Router: Step 1: Virtual Redemption
        Router->>StratA: redeem(sharesIn, receiver=Router)
        StratA->>Vault: Update Internal Ledger
        Vault-->>StratA: Credit USD' (Virtual Balance)
        StratA-->>Router: Return USD' Amount
    end

    rect rgb(35, 40, 50)
        Note right of Router: Step 2: Virtual Deposit
        Router->>StratB: deposit(USD', receiver=User)
        StratB->>Vault: Update Internal Ledger
        Vault-->>StratB: Allocate Collateral
        StratB-->>User: Mint New Shares
    end

The rebalancing process executes in two steps within a single atomic transaction:

Step 1: Virtual Redemption

Action	Description
User initiates swap	Calls swapStrategies(sharesIn, minSharesOut)
Router redeems shares	Burns source strategy shares
Vault updates ledger	Credits USD' to the Router (virtual balance)

Step 2: Virtual Deposit

Action	Description
Router deposits USD'	Deposits into destination strategy
Vault allocates collateral	Updates internal ledger allocation
User receives shares	Destination strategy mints new shares to user

Result: Completed in 1 block with 0% slippage.

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Security & Risk Management

Asset Isolation

Principle	Benefit
Vault-Held Collateral	Collateral lives in the Vault, not in strategy contracts
Strategy Sandboxing	A bug in one strategy cannot drain collateral from others
Access Controls	Only whitelisted strategies can interact with the Vault

Solvency Protection

The global solvency invariant is maintained at all times:

Total Assets (Collateral in Vault) ≥ Total Liabilities (Minted USD')

Liquidation Waterfall

In the event a strategy suffers a loss (NAV drops below $1.00):

Stage	Action
1. Strategy Absorbs Loss	The specific strategy's share price decreases
2. User Impact	Only users in that specific strategy absorb the loss
3. Base Layer Protected	USD' peg is maintained because liability decreases 1:1 with asset loss
4. System Remains Solvent	The global Vault remains solvent; other strategies unaffected

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Smart Contract Standards

Standard	Usage
ERC20	USD' base asset token
ERC4626	All yield strategy vaults
Multi-Sig	Administrative functions
Timelock	Parameter changes