ULayer Architecture

Detailed Technical Architecture for Stablecoin Infrastructure

Technical Deep Dive

ULayer System Architecture

┌───────────────────────────────────────────────────────────────────────────┐ │ ULayer System Architecture │ └───────────────────────────────────────────────────────────────────────────┘ ┌─────────────────────┐ ┌─────────────────────┐ ┌─────────────────────────┐ │ Cross-Chain │ │ Liquidity │ │ Stablecoin │ │ Gateway Layer │ │ Layer │ │ Issuance Layer │ └─────────┬───────────┘ └─────────┬───────────┘ └───────────┬─────────────┘ │ │ │ ┌─────────┴────────────────────────┴──────────────────────────┴─────────────┐ │ │ │ Core Layer (L1) - HotStuff BFT + PoS │ │ │ └─────────────────────────────────────────┬────────────────────────────────┘ │ ┌────────────────────────────────────────┴────────────────────────────────┐ │ │ │ EVM Layer (L2) - Smart Contract Extension Layer │ │ │ └─────────────────────────────────────────────────────────────────────────┘

Core Architecture Components

Design Principle: Modular architecture design with each layer independently replaceable while providing standardized interfaces to ensure the overall system works together.

Core Layer (L1) Architecture

Consensus Mechanism

  • Algorithm: HotStuff BFT + PoS hybrid
  • Block Time: 10ms microblocks + 100ms macroblocks
  • Validator Structure: 21 primary validators
  • Fast Confirmation: 7-validator subset for 300ms confirmation
  • Final Confirmation: Full 21-validator consensus for 1s finality
  • Fault Tolerance: Up to 7 malicious nodes

System Parameters

Parameter Value Notes
Validator Count 21 Expandable to 100 via governance
Microblock Size 512KB Generated every 10ms
Macroblock Size 5MB Contains multiple microblocks, every 100ms
TPS Limit 50,000+ For standard stablecoin transfers
Transaction Fee $0.001 Fixed fee model

Core Components

Native Stablecoin Engine

type StablecoinTransaction struct {
    From        string          // Sender address
    To          string          // Recipient address  
    Amount      *big.Int        // Transfer amount
    Currency    string          // Currency (USDT/USDC)
    PaymentID   string          // Order ID (required)
    OrderInfo   OrderInfo       // Order details
    KYCProof    *KYCProof       // KYC proof
    ExpiredAt   uint64          // Expiration time
}

Native KYC System

  • Tiered KYC: Automatic KYC level based on transaction amount and risk
  • Address Mapping: Secure mapping of on-chain addresses to real identities
  • Zero-Knowledge Proofs: Privacy-preserving identity verification
  • Real-time Monitoring: 24/7 automated compliance monitoring

Cross-Chain Liquidity Management

  • Multi-Chain Bridging: Support for major blockchain assets
  • Automatic Balancing: Intelligent liquidity allocation algorithm
  • Security Guarantees: Multi-signature + timelock mechanisms

HotStuff BFT + PoS Consensus Details

Consensus Flow

Microblock Generation (10ms) → Microblock Propagation → Subset Confirmation (300ms) → Macroblock Generation (100ms) → BFT Consensus → Final Confirmation (1s)
        

Key Consensus Algorithms

1. Fast Confirmation Algorithm

func FastConfirmation(
    microBlock *Block, 
    validatorSet *ValidatorSubset,
) (*Confirmation, error) {
    // 1. Select 7-validator subset
    validators := validatorSet.GetFastConfirmationSet()
    
    // 2. Send confirmation requests to subset
    confirmations := make([]*ValidatorConfirmation, 0)
    for _, validator := range validators {
        conf, err := validator.RequestConfirmation(microBlock)
        if err != nil {
            continue
        }
        confirmations = append(confirmations, conf)
        
        // 3. Return once we have 2/3+ confirmations
        if len(confirmations) >= FastConfirmThreshold {
            // 4. Generate aggregate confirmation proof
            proof := GenerateFastConfirmationProof(confirmations)
            return &Confirmation{
                BlockID:  microBlock.ID,
                Proof:    proof,
                Latency:  time.Millisecond * 300,
                Final:    false, // Fast but not final
            }, nil
        }
    }
    
    return nil, ErrNotEnoughConfirmations
}

2. Full Consensus Algorithm

func FullConsensus(
    mainBlock *Block,
    validatorSet *ValidatorSet,
) (*Confirmation, error) {
    // 1. Prepare Phase
    prepareVotes, err := collectPrepareVotes(
        mainBlock, 
        validatorSet.GetAllValidators(),
    )
    if err != nil || 
       len(prepareVotes) < BFTThreshold {
        return nil, ErrPrepareFailed
    }
    
    // 2. Pre-Commit Phase
    preCommits, err := collectPreCommits(
        mainBlock,
        prepareVotes,
        validatorSet.GetAllValidators(),
    )
    if err != nil || 
       len(preCommits) < BFTThreshold {
        return nil, ErrPreCommitFailed
    }
    
    // 3. Commit Phase
    commits, err := collectCommits(
        mainBlock,
        preCommits,
        validatorSet.GetAllValidators(),
    )
    if err != nil || 
       len(commits) < BFTThreshold {
        return nil, ErrCommitFailed
    }
    
    // 4. Finalization Phase
    finalProof := GenerateFinalConsensusProof(commits)
    return &Confirmation{
        BlockID:  mainBlock.ID,
        Proof:    finalProof,
        Latency:  time.Second * 1,
        Final:    true, // Full consensus final confirmation
    }, nil
}
Technical Challenge: Balancing fast confirmation with security. Using validator subsets to achieve millisecond-level confirmation while maintaining full consensus flow for ultimate security.

StableSwap AMM - Technical Details

Algorithm Design

StableSwap combines constant sum (x + y = k) and constant product (x * y = k) curves:

A · n^n · ∑xi + D = A · D · n^n + D^(n+1) / (n^n · ∏xi)

Dynamic Amplification Coefficient

func calculateDynamicA(
    priceVolatility float64, 
    deviationFromPeg float64
) uint256 {
    // Base amplification coefficient
    baseA := 200
    
    // Volatility penalty
    volatilityFactor := max(0.1, 
                        1 - priceVolatility * 10)
    
    // Deviation penalty
    deviationFactor := max(0.1, 
                       1 - deviationFromPeg * 20)
    
    // Calculate final amplification coefficient
    dynamicA := baseA * volatilityFactor * 
               deviationFactor
    
    // Ensure A is within reasonable range
    return min(max(dynamicA, 10), 1000)
}

Multi-Asset Pool Design

ULayer supports multiple stablecoin pool types:

  • Standard Pools: USDT/USDC/DAI
  • Cross-Chain Pools: ETH-USDC/BSC-USDC/Polygon-USDC
  • Tokenized Pools: USDT/cUSDT/aUSDT
  • Source Pools: USDC/USDP

Invariant Calculation

function _calculateD(
    uint256[] memory xp, 
    uint256 amp
) internal pure returns (uint256) {
    uint256 n = xp.length;
    uint256 sum = 0;
    for (uint256 i = 0; i < n; i++) {
        sum = sum.add(xp[i]);
    }
    if (sum == 0) return 0;
    
    uint256 d = sum;
    uint256 ann = amp.mul(n.pow(n));
    
    for (uint256 i = 0; i < 255; i++) {
        uint256 d_prev = d;
        uint256 prod = d;
        
        for (uint256 j = 0; j < n; j++) {
            prod = prod.mul(d).div(xp[j].mul(n));
        }
        
        d = ann.mul(sum).add(prod.mul(n)).mul(d).div(
            ann.sub(1).mul(d).add(n.add(1).mul(prod))
        );
        
        if (d > d_prev) {
            if (d.sub(d_prev) <= 1) break;
        } else {
            if (d_prev.sub(d) <= 1) break;
        }
    }
    
    return d;
}

Capital Efficiency Comparison

AMM Model Slippage on $1M Trade Required Pool Size Capital Efficiency
Uniswap v2 ~1% $100M 1x (baseline)
Uniswap v3 ~0.1% $20M 5x
Curve Finance ~0.05% $10M 10x
ULayer StableSwap ~0.02% $5M 20x

Cross-Chain Transfer - Technical Details

Transfer Mechanism

Source Chain Target Chain │ │ ▼ ▼ ┌──────────────┐ ┌──────────────┐ │ Lock/Burn │ │ Mint/Release │ │ Stablecoins │ │ Stablecoins │ └──────┬───────┘ └──────┬───────┘ │ │ ▼ ▼ ┌──────────────┐ Message ┌──────────────┐ │ Bridge │ ──────────────> │ Bridge │ │ Contract │ │ Contract │ └──────┬───────┘ └──────┬───────┘ │ │ ▼ ▼ ┌──────────────┐ Validator ┌──────────────┐ │ Message │ ──────────────> │ Message │ │ System │ Network │ System │ └──────────────┘ └──────────────┘

Bridge Operation Flow

  1. Initiation: User submits bridge request on source chain
  2. Lock or Burn: Stablecoins are either locked (if source chain) or burned (if not source chain)
  3. Message Transmission: Cross-chain message sent via validator network
  4. Message Verification: At least 14 validators (2/3 of 21) must verify the message
  5. Mint or Release: Stablecoins are either minted (if not source chain) or released (if source chain)
  6. Completion: User receives stablecoins on target chain

Security Guarantees

  • Multi-Signature Verification: 2/3 validator consensus required
  • Replay Protection: Unique bridge IDs and nonces
  • Double-Spend Prevention: Atomic operations with state tracking
  • Emergency Pause: Circuit breakers for critical issues

Bridge Contract Implementation

function completeBridge(
    bytes32 bridgeId,    // Bridge ID
    string memory txHash // Transaction hash
) external onlyValidator {
    BridgeRecord storage record = bridgeRecords[bridgeId];
    require(
        record.status == BridgeStatus.SourceConfirmed,
        "Invalid bridge status"
    );
    require(
        record.targetChain == block.chainid,
        "Wrong chain for completion"
    );
    
    // Update status
    record.status = BridgeStatus.Processed;
    record.transactionHash = txHash;
    
    // Mint or release tokens
    if (isNativeStablecoin(record.stablecoin, 
                          block.chainid)) {
        // If target chain is source chain, release tokens
        IERC20(record.stablecoin).transfer(
            record.targetAddress, 
            record.amount - record.fee
        );
    } else {
        // If target chain is not source chain, mint tokens
        ULayerStablecoin(record.stablecoin).bridgeMint(
            record.targetAddress,
            record.amount - record.fee
        );
    }
    
    // Distribute fees to validators
    distributeFees(bridgeId, record.fee);
    
    // Final status update
    record.status = BridgeStatus.Completed;
    
    emit BridgeCompleted(
        bridgeId,
        record.targetAddress,
        record.stablecoin,
        record.amount - record.fee
    );
}

Multi-Chain Liquidity Pool Architecture

Core Architecture

type MultiChainLiquiditySystem struct {
    // Per-chain pools
    ChainPools map[string]*ChainLiquidityPool
    
    // Global management
    GlobalManager struct {
        RebalanceEngine    *GlobalRebalanceEngine
        RiskManager        *MultiChainRiskManager  
        LiquidityOracle    *LiquidityOracleSystem
        GovernanceModule   *PoolGovernance
    }
    
    // Supported chains
    SupportedChains []ChainConfig{
        {ChainID: "ethereum", MinReserve: 5000000_000000},   // 5M USDT
        {ChainID: "bsc", MinReserve: 3000000_000000},        // 3M USDT  
        {ChainID: "polygon", MinReserve: 2000000_000000},    // 2M USDT
        {ChainID: "arbitrum", MinReserve: 1000000_000000},   // 1M USDT
        {ChainID: "tron", MinReserve: 2000000_000000},       // 2M USDT
        {ChainID: "avalanche", MinReserve: 1000000_000000},  // 1M USDT
    }
    
    // Total reserves: 12M USDT distributed reserves
    TotalReserves: 12000000_000000
}

Liquidity Management

  • Global View: Unified management across all chains
  • Dynamic Allocation: Adaptive distribution based on usage patterns
  • Risk Management: Multi-layer risk controls and circuit breakers
  • Performance Metrics: Real-time monitoring and optimization

Real-time Settlement Engine

func ProcessInstantSettlement(
    payment *CrossChainPayment,
) (*SettlementResult, error) {
    
    startTime := time.Now()
    
    // 1. Receive payment on source chain
    sourcePool := ChainPools[payment.SourceChain]
    receiveTx, err := sourcePool.ReceivePayment(&ReceivePaymentRequest{
        From:      payment.FromAddress,
        Amount:    payment.Amount,
        Token:     payment.Token,
        PaymentID: payment.PaymentID,
    })
    if err != nil {
        return nil, fmt.Errorf("payment reception failed: %w", err)
    }
    
    // 2. Real-time balance update
    updatePoolBalances(payment.SourceChain, payment.Token, 
        payment.Amount, true)
    
    // 3. Check target chain liquidity
    targetPool := ChainPools[payment.TargetChain]
    liquidity, err := targetPool.CheckLiquidity(payment.Token, 
        payment.Amount)
    if err != nil || !liquidity.Sufficient {
        return nil, fmt.Errorf("insufficient target liquidity")
    }
    
    // 4. Execute target chain settlement (no cross-chain required)
    settleTx, err := targetPool.ExecuteSettlement(&SettlementRequest{
        To:        payment.ToAddress,
        Amount:    payment.Amount,
        Token:     payment.Token,
        PaymentID: payment.PaymentID,
    })
    
    // 5. Update target chain balance
    updatePoolBalances(payment.TargetChain, payment.Token, 
        payment.Amount, false)
    
    // 6. Record completion time
    processingTime := time.Since(startTime)
    
    // 7. Return result
    return &SettlementResult{
        PaymentID:       payment.PaymentID,
        SourceTxHash:    receiveTx.Hash,
        TargetTxHash:    settleTx.Hash,
        ProcessingTime:  processingTime,  // Target: <500ms
        Status:         SettlementStatusCompleted,
        Cost:           big.NewInt(1000), // $0.001 internal cost
    }, nil
}

Delta Rebalancing Algorithm

Delta Algorithm Core Concept: Continuously monitors liquidity pool utilization rates vs target distribution. When deviation exceeds threshold, triggers fee adjustments, liquidity incentives, or active rebalancing to ensure system-wide liquidity balance.

Gas-Free Transaction Architecture

Relayer Network Design

Relayer Mechanism

  • Registration: Relayers stake funds to participate
  • Economic Model: Relayers earn fees from transactions
  • Competitive Market: Multiple relayers compete for transactions
  • Reputation System: Performance tracking ensures quality
  • Stake Slashing: Penalties for misbehavior

User Experience

  1. Transaction Creation: User prepares transaction
  2. Message Signing: User signs transaction with wallet
  3. Relayer Submission: Signed message sent to relayer
  4. Verification: Relayer verifies signature validity
  5. Execution: Relayer submits transaction to blockchain
  6. Fee Collection: Relayer collects small fee from output
  7. Result Notification: User notified of completion

GaslessRelaySystem Implementation

// Validate relay request
function validateRelayRequest(
    RelayRequest calldata request,
    bytes calldata signature
) internal view {
    // Verify signature
    address signer = recoverSigner(request, signature);
    require(signer == request.user, "Invalid signature");
    
    // Check nonce
    require(
        request.nonce == userNonces[request.user],
        "Invalid nonce"
    );
    
    // Check deadline
    require(
        block.timestamp <= request.deadline,
        "Request expired"
    );
    
    // Check relayer fee
    require(
        request.relayerFee <= request.amount * 
        maxRelayerFeeBps() / 10000,
        "Relayer fee too high"
    );
}

// Execute bridge operation
function executeBridgeOperation(
    address user,
    address stablecoin,
    uint256 amount,
    uint256 targetChain,
    address targetAddress
) internal returns (bytes32) {
    // Get bridge contract
    CrossChainBridge bridge = CrossChainBridge(
        bridgeAddress
    );
    
    // Transfer tokens from user to bridge contract
    IERC20(stablecoin).transferFrom(
        user, address(bridge), amount
    );
    
    // Execute bridge operation
    bytes32 bridgeId = bridge.initiateBridgeWithRelayer(
        user, 
        stablecoin, 
        amount, 
        targetChain, 
        targetAddress, 
        msg.sender  // Relayer gets credited
    );
    
    return bridgeId;
}
Security Considerations: The gasless system uses EIP-712 typed data signatures to ensure transaction integrity and prevent manipulation. Nonces and deadlines provide additional protection against replay attacks.

Validator Network Architecture

Validator System Design

Validator Roles

  • Consensus Participation: Block validation and production
  • Cross-Chain Message Verification: Validate bridge operations
  • Oracle Services: Provide external data feeds
  • Governance Participation: Vote on protocol upgrades
  • Security Monitoring: Monitor for anomalies and attacks

Selection & Incentives

  • Stake Requirement: Minimum stake to participate
  • Performance Metrics: Uptime, response time, accuracy
  • Reward Structure: Transaction fees and protocol rewards
  • Penalties: Slashing for malicious behavior
  • Rotation Mechanism: Periodic validator set updates

ValidatorRegistry Implementation

// Validator status
enum ValidatorStatus {
    None,      // Not a validator
    Pending,   // Awaiting approval
    Active,    // Active validator
    Slashed,   // Penalized
    Resigned   // Voluntarily exited
}

// Validator info
struct ValidatorInfo {
    address addr;                  // Address
    bytes publicKey;               // Public key
    uint256 stake;                 // Staked amount
    uint256 joinedAt;              // Join time
    ValidatorStatus status;        // Status
    uint256 totalVerified;         // Total verified messages
    uint256 missedVerifications;   // Missed verifications
    uint256 reputation;            // Reputation score
    string endpoint;               // API endpoint
}

// Apply as validator
function applyAsValidator(
    bytes memory publicKey,
    string memory endpoint
) external payable {
    require(
        msg.value >= minimumValidatorStake(),
        "Insufficient stake"
    );
    require(
        validators[msg.sender].status == ValidatorStatus.None,
        "Already registered"
    );
    
    validators[msg.sender] = ValidatorInfo({
        addr: msg.sender,
        publicKey: publicKey,
        stake: msg.value,
        joinedAt: block.timestamp,
        status: ValidatorStatus.Pending,
        totalVerified: 0,
        missedVerifications: 0,
        reputation: 0,
        endpoint: endpoint
    });
    
    emit ValidatorApplicationSubmitted(
        msg.sender, msg.value
    );
}

Threshold Calculations

// Get active validator count
function getActiveValidatorCount() public view returns (uint256) {
    return validatorList.length;
}

// Get validator threshold (2/3 majority)
function getValidatorThreshold() public view returns (uint256) {
    return (getActiveValidatorCount() * 2 / 3) + 1;
}

Technical Development Roadmap

Implementation Timeline

Phase Duration Technical Focus Deliverables
Phase 1
Core Protocol
3 months - Consensus implementation
- Core transaction processing
- Basic stablecoin features
- Core protocol repository
- Docker deployment
- Private testnet
Phase 2
AMM & Bridges
3 months - StableSwap implementation
- First cross-chain bridges
- Basic relayer network
- StableSwap contracts
- Bridge contracts
- Public testnet
Phase 3
Advanced Features
4 months - Complete gasless system
- Multi-chain adapters
- Liquidity management
- Full SDKs
- Developer documentation
- Security audits
Phase 4
Production
2 months - Performance optimization
- Final security audits
- Production deployment
- Mainnet launch
- Admin dashboard
- Monitoring infrastructure

Key Technical Tasks

  1. HotStuff consensus algorithm implementation and testing
  2. StableSwap AMM core algorithm implementation
  3. Cross-chain message passing protocol development
  4. Relayer network architecture and implementation
  5. Stablecoin issuance framework development
  1. Multi-chain adapter development for major blockchains
  2. Liquidity management system implementation
  3. Security audits and formal verification
  4. Performance optimization and scalability testing
  5. Developer tools, SDKs and documentation

Technical Summary

Key Technical Innovations

  • High-Performance Consensus: HotStuff BFT + PoS hybrid for 50,000+ TPS
  • Optimized StableSwap: 20x capital efficiency over standard AMMs
  • Universal Cross-Chain: Seamless operation across all major blockchains
  • Gasless Transactions: Complete relayer-based system for gas-free operations
  • Delta Rebalancing: Intelligent liquidity management across chains

Developer Resources

  • GitHub Repository: github.com/ulayer
  • Documentation: docs.ulayer.org
  • SDK Libraries: JavaScript, Python, Go, Java
  • API Reference: REST, GraphQL, and WebSocket APIs
  • Testnet Access: Early developer program available

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