5.3 Solution Design

5.3.1 Overview

The SoSoValue Index platform is built on a robust and transparent on-chain architecture, designed to simplify crypto index investing while addressing the unique challenges of the crypto market. Our solution leverages cutting-edge technology and trusted third-party custody services to provide a secure, efficient, and low-cost investment experience.

By integrating transparent methodologies, automated rebalancing, and real-time data tracking, the platform ensures that investors can confidently access diversified exposure across major crypto sectors. The design prioritizes scalability, reliability, and adaptability, enabling both individual and institutional investors to seamlessly participate in the evolving digital asset ecosystem.

5.3.2 Mint

Before minting, WLP needs to send a quote request to Protocol Server, which will return a quote order.
If the order price is favorable, WLP can apply minting with the order on-chain. Cash will be transferred to the Protocol Contract first.
The Protocol will verify the order and inform PMM to fill the order.
Once PMM receives the order request, PMM will send the underlying tokens to our Custodian Wallets.
After verifying the transfers, the Protocol will transfer cash to PMM and mint SSI token to WLP.

5.3.3 Burn

Before Burn, WLP needs to send a quote request to Protocol Server, which will return an order.
If the order price is favorable, WLP can apply Burn with the order on-chain. SSI token will be transferred to the Protocol Contract first.
The Protocol will verify the order and inform PMM to fill the order.
Once PMM receives the order request, PMM will transfer cash to the Protocol Contract.
Then Protocol will withdraw the underlying tokens from Custodian Wallet to PMM.
After verifying the transfers, Protocol will burn SSI tokens and transfer cash to WLP.

5.3.4 Rebalance

The protocol enters the rebalancing state and pauses minting and burning operations.
The protocol first fetches the target index constituent token information, including rebalancing details, from the index compiler.
The protocol server sends a rebalancing quote request to PMM, which will return a quote order.
If the order price is favorable, the protocol will verify the order and notify PMM to fill the order.
During the rebalancing process, tokens are transferred between the protocol's custody wallet and PMM wallets. PMM will sell the tokens being removed from the index and buy the tokens being added. This process is secured by on-chain smart contracts to ensure the trustworthiness of the transactions.
After all trades are completed, the protocol updates the index token constituent information and marks the rebalancing process as complete.
Once the rebalancing process is complete, minting and burning operations resume.