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Token Lifecycle

Token Lifecycle

The SoulPeg protocol manages a complete lifecycle for sUSDC, the soul-bound staking token. Each step is carefully designed to enforce security, ensure accountability, and deliver sustainable yield without speculative transferability.

1. Deposit and Mint

Users begin by authorizing the protocol to transfer USDC from their wallets. Once approved, the protocol mints an equivalent amount of sUSDC (1:1) to the user’s address. This operation is executed by the protocol owner (typically a multisig) using the depositAndMint() function.

Key characteristics:

  • sUSDC is minted with a defined lock period (min 1 hour, max 365 days)
  • Lock is enforced per-wallet via a timestamp (unlockAt)
  • Tokens are non-transferable while locked

2. Lock Period

Upon minting, the user’s wallet is time-locked, preventing token movement or approval until the lock expires. Lock durations are user-defined but bounded within the allowed range. After the lock expires, the user must manually call unlock() to transition their address into a fully transferable state.

3. Reward Distribution

The protocol periodically issues yield through the rewardMint() function. This function mints additional sUSDC tokens to selected users. Newly minted rewards inherit the lock status:

  • If the user is already locked, new rewards follow the existing lock
  • If the user is new, a 1-second dummy lock is applied to enforce a manual unlock() step

4. Unlocking

Once the lock period expires, users must explicitly call unlock() to mark their address as transferable. This adds an extra layer of security and prevents accidental token transfers. Admins may also perform an emergency unlock using adminUnlock() in special cases.

5. Redemption

If early exit is required, admins may invoke earlyRedeem() to burn sUSDC from a user and return an equal amount of USDC. This process is strictly owner-controlled and requires the protocol to hold sufficient USDC reserves.

6. Lifecycle Completion

After unlocking, users can:

  • Transfer sUSDC (if protocol allows via isDex)
  • Interact with whitelisted DEX or liquidity pools
  • Burn sUSDC via burn() for treasury or system operations

The lifecycle is tracked on-chain using mappings like unlockAt, totalStaked, and hasStaked, allowing complete visibility into staking history and lock status.