Architecture Overview

Core Components

Nomial V1 has three main components:

1. Smart Contracts: Contain logic that controls collateral and pooled capital

2. Validators: Off-chain clients that control all on-chain operations in the protocol

3. API: Off-chain service that facilitates interactions with the protocol

Smart Contracts

Core contracts:

• CollateralPool

  • Accepts collateral deposits of any ERC20 token from solvers

  • Implements a time-locked withdrawal mechanism to allow time for liquidations

  • Allows Validators to liquidate solver balances if necessary

• InventoryPool

  • Stores LP capital.

  • Borrowers (e.g., solvers) borrow from instances of InventoryPool

  • Each pool instance supports a single ERC20 token

Validators

Validators are responsible for triggering collateral liquidations and granting borrow permissions for inventory access. A quorum of Validators can:

• Liquidate solver balances and pending withdrawals in the CollateralPool

• Grant permission to borrow from InventoryPools (based on collateral and outstanding positions)

• Update parameters such as withdrawal periods and interest rates

Learn more about validators: Security Model.

API

The API provides:

• An endpoint for solvers to request validator approval for a borrow transaction

• Transaction data for interactions with the smart contracts

• Read-only state info about validators, borrowers, and pools.