5.3 Solution Design
Overview
SSI(SoSoValue Indexes) Protocol leverages on-chain smart contracts to repackage multi-chain, multi-asset portfolios into Wrapped Tokens. These tokens represent a basket of underlying assets, enabling Wrapped Tokens to track the value fluctuations of the basket, achieving the effects of passive index investing.
To achieve this, SSI Protocol integrates six types of participants to build a robust protocol ecosystem:
User: Investors who gain market beta/alpha returns by purchasing index tokens.
UNI LP (Uniswap Liquidity Provider): Their primary role is to provide liquidity on Uniswap and earn transaction fees from Uniswap.
WLP (Whitelist Participant): SSI index tokens through the protocol and balancing Uniswap market prices by buying/selling at market rates, aiming to align Uniswap prices with underlying asset value and earning arbitrage profits from price stabilization.
PMM (Private Market Makers): Helps purchase the underlying spot assets of index tokens and stores them in custody accounts.
Custody: Ensures the secure storage of the underlying assets of index tokens.
Index Compiler: Responsible for formulating the index construction methodology, determining the constituent tokens and weights, and ensuring the long-term effective operation of the index.
Index Token Minting
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.
Index Token Burning
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.
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.
WLP
In the SoSoValue Indexes Protocol, Whitelisted Participants (WLPs) play a crucial role in maintaining the secondary market price of SSI tokens in alignment with the underlying asset value. Each WLP undergoes a KYB verification process, and upon approval, gains the right to mint and redeem SSI tokens. When price discrepancies arise in the secondary market, WLPs can arbitrage the spread between the market price and the mint/redeem price, helping to bring the secondary market price back in line with the intrinsic value of the underlying assets.
For example, if buying pressure drives the secondary market price of MAG7.ssi up to $1.02 while its underlying asset value remains at $1.00, a positive premium of approximately 2% emerges. In this scenario, WLPs can mint new MAG7.ssi tokens at close to $1.00 using USDC and sell them in the secondary market at $1.02, capturing a 2% arbitrage profit. While generating arbitrage gains, WLPs also contribute to expanding the total circulating supply of MAG7.ssi and increasing the protocol’s Asset Under-Management (AUM).
Index General Methodology
Key Addresses (Base Chain)
Indexes Token Addresses MAG7.ssi: 0x9E6A46f294bB67c20F1D1E7AfB0bBEf614403B55 DEFI.ssi: 0x164ffdaE2fe3891714bc2968f1875ca4fA1079D0 MEME.ssi: 0xdd3acDBDc7b358Df453a6CB6bCA56C92aA5743aA USSI: 0x3a46ed8FCeb6eF1ADA2E4600A522AE7e24D2Ed18
Contract Addresses swap: 0xF909bfa750721501B4F8433588FaE5cE303Db08B factory: 0xb04eB6b64137d1673D46731C8f84718092c50B0D issuer: 0x0306acEb4c20FF33480d90038F8b375cC6A6b66e rebalancer: 0x84663e30973D552ac357FD04F3Ac6ebbD495Ab15 feeManager: 0x2E469365030F068eCB1176a0D5600bA470Cf07A9 stakeFactory: 0x585834242BB31427B1dC7486DD4BDe7c724e35c1 assetLocking: 0x935A4B1F6F3E891a226b2522ac22d45Ce5839383 Protocol OWNER: 0xd463D3d8333b7AD6a14d00e1700C80AF5A37F751 (cobo custody)
Protocol Audits
The integrity and security of smart contracts are crucial. We maintain this by conducting comprehensive audits, which help identify potential vulnerabilities and logical errors. We have completed several rounds of audits, with more scheduled. These rigorous audits, conducted by industry experts, enhance our security and aim to strengthen trust in our platform. We have undertaken a multi-phased audit program to ensure the highest level of security on the protocol.
Phase 1: A comprehensive audit of the main contract by SlowMist.
Phase 2: Supplementary audit of newly developed modules by SlowMist.
SlowMist-Updated Audit Report.pdf
Phase 3: Full contract audit conducted by Zenith, Blocksec and TenArmor.
Phase 4: A new round of audits conducted by Quantstamp and Zellic.
Phase 5: The contracts underwent a comprehensive upgrade on June 3, 2025 To ensure the security and integrity of the updated components, dedicated audits were conducted by TenArmor and BlockSec.
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