🪙 Decentralized Stablecoin Protocol

A robust, overcollateralized stablecoin protocol built on the Ethereum blockchain, featuring algorithmic stability and exogenous collateral backing. 💎

🔍 Overview

This protocol implements a decentralized stablecoin (DSC) pegged to USD, backed by cryptocurrency collateral (wETH and wBTC). The system is designed with the following key properties:

1. Relative Stability: Pegged to USD through Chainlink Price Feeds 📈
2. Stability Mechanism: Algorithmic with coded collateralization rules ⚙️
3. Collateral Type: Exogenous (wETH, wBTC) 🔐
4. Minimum Collateralization Ratio: 200% 💪
5. Liquidation Threshold: 50% of collateral value ⚠️

🏗️ Technical Architecture

📊 System Architecture Diagram

graph TD
    subgraph External
        User[User/dApp]
        CP[Chainlink Price Feeds]
        WETH[WETH Token]
        WBTC[WBTC Token]
    end

    subgraph Protocol Core
        DSE[DSCEngine]
        DSC[DecentralizedStableCoin]
        OL[OracleLib]
    end

    %% User interactions
    User -->|Deposit Collateral| DSE
    User -->|Mint/Burn DSC| DSE
    User -->|Transfer DSC| DSC

    %% Internal interactions
    DSE -->|Mint/Burn| DSC
    DSE -->|Get Prices| OL
    OL -->|Validate Prices| CP

    %% Collateral flows
    WETH -->|Collateral| DSE
    WBTC -->|Collateral| DSE

    %% Special nodes
    style DSE fill:#ff9900,stroke:#333,stroke-width:2px
    style DSC fill:#66b2ff,stroke:#333,stroke-width:2px
    style OL fill:#99ff99,stroke:#333,stroke-width:2px

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1. DSCEngine.sol

   • Main protocol logic
   • Handles collateral deposits/withdrawals
   • Manages minting/burning of DSC
   • Implements liquidation mechanics
   • Maintains health factors

2. DecentralizedStableCoin.sol

   • ERC20 implementation
   • Controlled minting/burning mechanics
   • Owner-only operations

3. OracleLib.sol

   • Price feed management
   • Stale price protection
   • Chainlink integration

⭐ Key Features ⭐

• Overcollateralization: Always maintains >100% collateral backing 💰
• Liquidation System: Automated position management with bonus incentives 🤖
• Price Oracle Integration: Real-time price feeds with staleness checks 📊
• Reentrancy Protection: Secure against common attack vectors 🛡️
• Modular Design: Separated concerns for maintainability 🧩

🔒 Security Measures

• Comprehensive test suite including:
  • Unit tests ✅
  • Integration tests 🔄
  • Fuzz testing with invariant checks 🎲
  • Failure case handling ⛓️‍💥
• Multiple security patterns:
  • Checks-Effects-Interactions pattern
  • Pull over push payments
  • Guard checks
  • Reentrancy guards

🧪 Testing & Quality Assurance

The protocol includes extensive testing infrastructure:

• Invariant Tests: Ensuring system-wide properties hold under any conditions
• Fuzz Testing: Random input testing with both fail-on-revert and continue-on-revert strategies
• Integration Tests: Complete system interaction verification
• Mock Contracts: Thorough edge case testing

📋 Technical Specifications

• Solidity Version: 0.8.19
• Framework: Foundry
• Dependencies: OpenZeppelin, Chainlink

💡 Development Highlights

• Clean, well-documented code following best practices
• Extensive commenting for maintainability
• Gas-optimized operations ⚡
• Modular architecture for upgradability
• Comprehensive error handling

👨‍💻 For Developers

🎯 Getting Started

1. Clone the repository

git clone https://github.com/SquilliamX/Foundry-Defi-Stablecoin.git

2. Install dependencies

forge install

3. Run tests

forge test

4. Run specific test file

forge test --mt <name_of_test>

5. Run coverage report

forge coverage

🛡️ Security Considerations

This protocol has been designed with security as a primary concern, implementing:

• Rigorous input validation
• Secure math operations
• Access controls
• Price feed validation
• Emergency pause functionality

⚠️ Known Considerations

1. Chainlink oracle dependency
2. Market volatility risks
3. Liquidation threshold parameters
4. Price feed staleness checks
5. Collateral value fluctuations

💫 Inspiration

This protocol draws inspiration from successful stablecoin systems like MakerDAO while implementing unique features and improvements. It's designed to be minimal yet robust, focusing on core functionality and security.

🤝 Contributing

Contributions are welcome! Please feel free to submit a Pull Request. For major changes, please open an issue first to discuss what you would like to change.

Please make sure to update tests as appropriate.

📜 License

This project is licensed under the MIT License

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Note: This protocol is a demonstration of advanced Solidity development practices and should not be used in production without thorough auditing. ⚠️

Built with ❤️ by Squilliam