Abstract

SoulPeg is a decentralized staking protocol designed to issue soul-bound yield-bearing tokens on the Binance Smart Chain (BSC). The system centers around sUSDC, a non-transferable token minted 1:1 from USDC deposits that generates sustainable yields through integration with Venus Protocol.

Unlike traditional staking platforms, SoulPeg enforces time-based locking per address, requires explicit manual unlocking, and eliminates token transferability during the lock period. This architecture removes entire classes of exploits common in DeFi, including flash loan attacks and recursive yield farming, while also reinforcing the connection between the staker and their position.

Yields are generated transparently through Venus Protocol's lending markets, with the protocol retaining a 7% fee on generated yields. Users receive 93% of Venus yields, providing sustainable returns without relying on token inflation. Additional rewards may be distributed through governance-controlled minting.

To address liquidity needs while maintaining security, SoulPeg introduces SPUSD (SoulPeg USD), a tradeable ERC20 wrapper for sUSDC. This dual-token system allows users to access liquidity through SPUSD trading on decentralized exchanges while their underlying sUSDC continues generating yield. The protocol also implements a maintenanceOperation function for KYC-verified emergency recovery scenarios, providing an additional safety net for users.

SoulPeg is designed as a secure, trust-minimized staking foundation that combines soul-bound token mechanics with battle-tested yield generation, creating a unique balance between fund safety, sustainable returns, and liquidity flexibility through the SPUSD wrapper system.