Architecture Overview

Nomial V1 is a protocol for cross-chain inventory access, designed for intent solvers. It allows solvers to deposit ERC20 tokens as collateral and borrow against this collateral on multiple chains.

Core Components

Nomial V1 has three main components:

1. Smart Contracts: hold solver collateral and LP provided capital

2. Validators: control borrow permissions and solver allowlist

3. API: provides helpful endpoints for interactions with Smart Contracts and Validators

4. Interest Rate Model: a two-slope interest rate model similar to Aave v3

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

Learn more on Smart Contracts.

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 like withdrawal periods and interest rates

Learn more on Security Model.

API

The API provides:

• An endpoint to make borrow requests which route to the Validators for approval

• Methods to construct calldata for interacting directly with the smart contracts

• State information about the protocol

Interest Rate Model

The protocol uses a two-slope interest rate model similar to Aave v3 to determine LP returns. Learn more on Interest Rate Model.