SummaryValue LockedOnchain costsRisk summaryRisk analysisRollup stageTechnologyOperatorWithdrawalsOther considerationsPermissionsSmart contracts

Term Structure logoTerm Structure

Badges

About

Term Structure introduces a distinct ZK Rollup solution democratizing fixed-rate and fixed-term borrowing and lending as well as fixed income trading by offering low transaction fees and enabling forced withdrawals.

Value Locked

$971.45 K

3.10%

Canonically Bridged
$971.45 K
Externally Bridged
$0.00
Natively Minted
$0.00
View TVL Breakdown
  • Tokens
  • Daily TPS
  • 30D tx count
  • Stage
    Stage 0
  • Type
    ZK Rollup
  • Purposes
    DeFi, Lending
    • Sequencer failureState validationData availabilityExit windowProposer failure

    Badges

    About

    Term Structure introduces a distinct ZK Rollup solution democratizing fixed-rate and fixed-term borrowing and lending as well as fixed income trading by offering low transaction fees and enabling forced withdrawals.

    Value Locked
    Onchain costs
    Risk summary

    Funds can be stolen if

    1. the cryptography is broken or implemented incorrectly,
    2. a contract receives a malicious code upgrade. There is no delay on code upgrades (CRITICAL).

    Funds can be lost if

    1. the user is unable to generate the non-trivial ZK proof for exodus withdraw,
    2. the flashloan mechanism is implemented incorrectly.

    Users can be censored if

    1. the operator refuses to include their transactions. However, there exists a mechanism to independently exit the system.

    MEV can be extracted if

    1. the operator exploits their centralized position and frontruns user transactions.
    Risk analysis
    Sequencer failureState validationData availabilityExit windowProposer failure

    Sequencer failure

    Force via L1

    Users can force the sequencer to include a withdrawal transaction by submitting a request through L1. If the sequencer censors or is down for for more than 14d, users can use the exit hatch to withdraw their funds.

    State validation

    ZK proofs (SN)

    zkSNARKS are zero knowledge proofs that ensure state correctness, but require trusted setup.

    Data availability

    On chain

    All of the data needed for proof construction is published on Ethereum L1.

    Exit window

    None

    There is no window for users to exit in case of an unwanted regular upgrade since contracts are instantly upgradable.

    Proposer failure

    Use escape hatch

    Users are able to trustlessly exit by submitting a zero knowledge proof of funds.

    Rollup stage
    Term StructureTerm Structure is a
    Stage 0
    ZK Rollup.
    The requirement for available node software is under review

    Learn more about Rollup stages
    Please keep in mind that these stages do not reflect rollup security, this is an opinionated assessment of rollup maturity based on subjective criteria, created with a goal of incentivizing projects to push toward better decentralization. Each team may have taken different paths to achieve this goal.
    Technology

    Validity proofs ensure state correctness

    Each update to the system state must be accompanied by a ZK proof that ensures that the new state was derived by correctly applying a series of valid user transactions to the previous state. These proofs are then verified on Ethereum by a smart contract.

    1. RollupFacet.sol - Etherscan source code, verifyOneBlock function

    Zero knowledge SNARK cryptography is used

    Despite their production use zkSNARKs are still new and experimental cryptography. Cryptography has made a lot of advancements in the recent years but all cryptographic solutions rely on time to prove their security. In addition zkSNARKs require a trusted setup to operate.

    • Funds can be stolen if the cryptography is broken or implemented incorrectly.

    1. Verifier.sol - Etherscan source code
    2. EvacuVerifier.sol - Etherscan source code

    All data required for proofs is published on chain

    All the data that is used to construct the system state is published on chain in the form of cheap calldata. This ensures that it will always be available when needed.

    1. RollupFacet.sol - Etherscan source code, _commitOneBlock function
    Operator

    The system has a centralized operator

    The operator is the only entity that can propose blocks. A live and trustworthy operator is vital to the health of the system.

    • MEV can be extracted if the operator exploits their centralized position and frontruns user transactions.

    1. RollupFacet.sol - Etherscan source code, onlyRole in commit, verify, execute functions

    Users can force exit the system

    Force exit allows the users to escape censorship by withdrawing their funds. The system allows users to force the withdrawal of funds by submitting a request directly to the contract on-chain. The request must be served within a defined time period. If this does not happen, the system will halt regular operation and permit trustless withdrawal of funds.

    • Users can be censored if the operator refuses to include their transactions. However, there exists a mechanism to independently exit the system.

    1. AccountFacet.sol - Etherscan source code, forceWithdraw function
    2. Force Withdrawal and Evacuation Mode - Term Structure documentation
    Withdrawals

    Regular exit

    The user initiates the withdrawal by submitting a regular transaction on this chain. When the block containing that transaction is proven the funds become available for withdrawal on L1. Finally the user submits an L1 transaction to claim the funds. This transaction does not require a merkle proof.

    1. AccountFacet.sol - Etherscan source code, withdraw function
    2. Withdraw - Term Structure documentation

    Forced exit

    If the user experiences censorship from the operator with regular exit they can submit their withdrawal requests directly on L1. The system is then obliged to service this request. Once the force operation is submitted and if the request is serviced, the operation follows the flow of a regular exit.

    1. AccountFacet.sol - Etherscan source code, forceWithdraw function
    2. Forced Withdrawal - Term Structure documentation

    Emergency exit

    If the enough time deadline passes and the forced exit is still ignored the user can put the system into Evacuation Mode, disallowing further state updates. In that case everybody can withdraw by submitting a zero knowledge proof of their funds with their L1 transaction.

    • Funds can be lost if the user is unable to generate the non-trivial ZK proof for exodus withdraw.

    1. Evacuation Mode - Term Structure documentation
    Other considerations

    Flashloans on escrowed funds

    Note: This section requires more research and might not present accurate information.

    The protocol allows flashloans with the funds locked with the bridge, for a fee.

    • Funds can be lost if the flashloan mechanism is implemented incorrectly.

    1. FlashloanFacet.sol - Etherscan source code, flashLoan function
    Permissions

    The system uses the following set of permissioned addresses:

    Admins 0xa00d…D818

    Can update the main verifier, the evacuation verifier, can set the flash loan premium, set the half liquidation threshold, the liquidation factor, the borrow rate, the rollover fee, the withdraw protocol fee, the price feed, the stablecoin used, the minimum deposit amount and it can pause the system.

    TermStructureMultisig 0xa00d…D818

    This is a Gnosis Safe with 4 / 6 threshold. Owner of the protocol, meaning it can upgrade the project implementation potentially gaining access to all funds.

    TermStructureMultisig participants (6) 0x6Ed5…8C440x83d4…e3980x50E6…B80d0x85e5…0D820x8716…d3480xa719…0F93

    Those are the participants of the TermStructureMultisig.

    Operators 0xeBec…14F8

    Can add tokens to the system.

    Committers 0x0A4a…De12

    Can commit blocks on L1 and revert pending (i.e. not yet executed) blocks.

    Verifiers 0x0A4a…De12

    Can verify blocks on L1.

    Executers 0x0A4a…De12

    Can execute blocks on L1.

    VaultMultisig 0x23bC…f529

    This is a Gnosis Safe with 4 / 6 threshold. Address collecting a portion of protocol fees. Currently set to 100% of the fees.

    VaultMultisig participants (6) 0x6Ed5…8C440x83d4…e3980x50E6…B80d0x85e5…0D820x8716…d3480xa719…0F93

    Those are the participants of the VaultMultisig.

    InsuranceMultisig 0x2df3…8165

    This is a Gnosis Safe with 4 / 6 threshold. Address collecting a portion of protocol fees. Currently set to 0% of the fees.

    InsuranceMultisig participants (6) 0x6Ed5…8C440x83d4…e3980x50E6…B80d0x85e5…0D820x8716…d3480xa719…0F93

    Those are the participants of the InsuranceMultisig.

    TreasuryMultisig 0xB7ef…F5ca

    This is a Gnosis Safe with 4 / 6 threshold. Address collecting a portion of protocol fees. Currently set to 0% of the fees.

    TreasuryMultisig participants (6) 0x6Ed5…8C440x83d4…e3980x50E6…B80d0x85e5…0D820x8716…d3480xa719…0F93

    Those are the participants of the TreasuryMultisig.

    Smart contracts

    The system consists of the following smart contracts on the host chain (Ethereum):

    Verifier 0x2336…86cE

    Verifier contract used to verify the SNARK proofs.

    Can be upgraded by:
    TermStructureMultisig

    Upgrade delay: None

    Value Locked is calculated based on these smart contracts and tokens:

    The current deployment carries some associated risks:

    • Funds can be stolen if a contract receives a malicious code upgrade. There is no delay on code upgrades (CRITICAL).