Building DeFi Protocols with Main SDK

Create comprehensive DeFi protocols using Saros Main SDK’s traditional AMM, governance, and ecosystem features

Building DeFi Protocols with Main SDK

Build full-featured DeFi protocols using Saros Main SDK’s comprehensive suite of traditional AMM features, governance systems, and ecosystem integrations.

Protocol Architecture Fundamentals

Core DeFi Protocol Structure

import { SarosSDK, ProtocolBuilder, GovernanceModule } from '@saros-finance/sdk';
import { Connection, PublicKey, Keypair } from '@solana/web3.js';

class DeFiProtocolFoundation {
  private saros: SarosSDK;
  private governance: GovernanceModule;
  private treasury: TreasuryManager;

  constructor(connection: Connection, authority: Keypair) {
    this.saros = new SarosSDK(connection, authority);
    this.governance = new GovernanceModule(this.saros);
    this.treasury = new TreasuryManager(this.saros);
  }

  async initializeProtocol(config: ProtocolConfig): Promise<ProtocolInstance> {
    // Create governance token
    const governanceToken = await this.saros.createToken({
      name: config.protocolName,
      symbol: config.symbol,
      decimals: 9,
      totalSupply: config.totalSupply,
      mintAuthority: config.governanceAuthority
    });

    // Initialize treasury with multi-sig
    const treasury = await this.treasury.initialize({
      governanceToken: governanceToken.mint,
      treasuryAuthority: config.treasuryMultisig,
      initialFunding: config.initialFunding,
      feeCollection: true
    });

    // Set up governance system
    const governance = await this.governance.initialize({
      governanceToken: governanceToken.mint,
      votingDelay: config.votingDelay || 86400, // 24 hours
      votingPeriod: config.votingPeriod || 259200, // 3 days
      proposalThreshold: config.proposalThreshold || 100000, // 100k tokens
      quorumThreshold: config.quorumThreshold || 0.04 // 4%
    });

    return {
      protocolAddress: treasury.address,
      governanceAddress: governance.address,
      tokenMint: governanceToken.mint,
      treasury,
      governance,
      startTime: Date.now()
    };
  }
}

Traditional AMM Implementation

Professional AMM Pool Factory

class AMMPoolFactory {
  private saros: SarosSDK;

  async createLiquidityPool(
    tokenA: PublicKey,
    tokenB: PublicKey,
    feeRate: number = 0.003, // 0.3% fee
    initialPrice?: number
  ): Promise<PoolCreationResult> {
    // Validate token pair
    await this.validateTokenPair(tokenA, tokenB);

    // Create constant product AMM pool
    const pool = await this.saros.createPool({
      tokenA,
      tokenB,
      feeRate,
      initialPrice,
      poolType: 'ConstantProduct',
      curve: 'x*y=k',
      protocolOwner: this.getProtocolAuthority()
    });

    // Set up fee collection
    await this.setupFeeCollection(pool.address);

    // Initialize liquidity mining rewards
    await this.initializeLiquidityMining(pool.address);

    return {
      poolAddress: pool.address,
      lpTokenMint: pool.lpTokenMint,
      initialTVL: pool.initialTVL,
      estimatedAPY: await this.estimatePoolAPY(pool.address),
      swapFeeRate: feeRate,
      liquidityMiningAPY: await this.estimateMiningAPY(pool.address)
    };
  }

  async addInitialLiquidity(
    poolAddress: PublicKey,
    amountA: number,
    amountB: number,
    lpTokenRecipient: PublicKey
  ): Promise<LiquidityResult> {
    // Add liquidity to newly created pool
    const result = await this.saros.addLiquidity({
      pool: poolAddress,
      amountA,
      amountB,
      minimumLPTokens: this.calculateMinimumLPTokens(amountA, amountB),
      recipient: lpTokenRecipient,
      deadline: Date.now() + 300000 // 5 minutes
    });

    // Update pool analytics
    await this.updatePoolMetrics(poolAddress);

    return result;
  }
}

Governance System Implementation

DAO Governance Framework

class DAOGovernanceSystem {
  private governance: GovernanceModule;
  private voting: VotingSystem;
  private treasury: TreasuryManager;

  async createProposal(
    proposer: PublicKey,
    proposalData: ProposalData
  ): Promise<ProposalResult> {
    // Validate proposer has enough governance tokens
    const voterWeight = await this.governance.getVoterWeight(proposer);
    if (voterWeight < this.governance.proposalThreshold) {
      throw new Error('Insufficient tokens to create proposal');
    }

    // Create governance proposal
    const proposal = await this.governance.createProposal({
      proposer,
      title: proposalData.title,
      description: proposalData.description,
      instructions: proposalData.instructions, // On-chain actions to execute
      votingDelay: proposalData.votingDelay || 86400,
      votingPeriod: proposalData.votingPeriod || 259200,
      category: proposalData.category // 'treasury', 'protocol', 'emergency'
    });

    // Notify governance participants
    await this.notifyGovernanceParticipants(proposal);

    return {
      proposalId: proposal.id,
      proposalAddress: proposal.address,
      votingStartTime: proposal.votingStartTime,
      votingEndTime: proposal.votingEndTime,
      status: 'pending'
    };
  }

  async executePassedProposal(proposalId: string): Promise<ExecutionResult> {
    const proposal = await this.governance.getProposal(proposalId);
    
    // Verify proposal passed and is executable
    if (proposal.status !== 'passed') {
      throw new Error('Proposal has not passed governance vote');
    }

    if (Date.now() < proposal.executionDelay) {
      throw new Error('Proposal still in execution delay period');
    }

    // Execute proposal instructions
    const executionResults = [];
    
    for (const instruction of proposal.instructions) {
      try {
        const result = await this.executeInstruction(instruction);
        executionResults.push({ instruction, result, success: true });
      } catch (error) {
        executionResults.push({ 
          instruction, 
          error: error.message, 
          success: false 
        });
      }
    }

    // Update proposal status
    await this.governance.updateProposalStatus(proposalId, 'executed');

    return {
      proposalId,
      executedInstructions: executionResults.filter(r => r.success).length,
      failedInstructions: executionResults.filter(r => !r.success).length,
      executionResults
    };
  }
}

Yield Farming and Incentives

Comprehensive Reward System

class YieldFarmingSystem {
  private saros: SarosSDK;
  private rewardCalculator: RewardCalculator;

  async createFarmingPool(
    lpTokenMint: PublicKey,
    rewardToken: PublicKey,
    rewardRate: number, // tokens per second
    farmDuration: number // seconds
  ): Promise<FarmingPoolResult> {
    // Create staking pool for LP tokens
    const farmingPool = await this.saros.createStakingPool({
      stakingToken: lpTokenMint,
      rewardToken,
      rewardRate,
      farmDuration,
      poolAuthority: this.getProtocolAuthority()
    });

    // Fund the pool with rewards
    await this.fundRewardPool(
      farmingPool.address,
      rewardToken,
      rewardRate * farmDuration
    );

    // Set up reward distribution schedule
    await this.setupRewardSchedule(farmingPool.address, {
      startTime: Date.now(),
      endTime: Date.now() + (farmDuration * 1000),
      rewardRate,
      bonusMultipliers: this.calculateLoyaltyBonuses()
    });

    return {
      farmingPoolAddress: farmingPool.address,
      totalRewards: rewardRate * farmDuration,
      estimatedAPY: await this.calculateFarmingAPY(farmingPool.address),
      participantCount: 0,
      totalStaked: 0
    };
  }

  async stakeLPTokens(
    farmingPool: PublicKey,
    lpTokens: number,
    staker: PublicKey
  ): Promise<StakingResult> {
    // Stake LP tokens in farming pool
    const stakingResult = await this.saros.stake({
      pool: farmingPool,
      amount: lpTokens,
      staker,
      lockPeriod: this.getOptimalLockPeriod(lpTokens)
    });

    // Calculate expected rewards
    const expectedDailyRewards = await this.calculateExpectedRewards(
      farmingPool,
      lpTokens,
      stakingResult.lockPeriod
    );

    return {
      stakingPosition: stakingResult.position,
      expectedDailyRewards,
      lockPeriod: stakingResult.lockPeriod,
      bonusMultiplier: stakingResult.bonusMultiplier,
      unstakeDate: stakingResult.unstakeDate
    };
  }

  async claimRewards(
    farmingPool: PublicKey,
    staker: PublicKey
  ): Promise<ClaimResult> {
    // Calculate accumulated rewards
    const accumulatedRewards = await this.rewardCalculator.getAccumulatedRewards(
      farmingPool,
      staker
    );

    // Claim rewards with optimal timing (gas efficient)
    const claimResult = await this.saros.claimRewards({
      pool: farmingPool,
      staker,
      amount: accumulatedRewards.totalRewards,
      claimStrategy: 'compound' // Reinvest rewards automatically
    });

    return {
      rewardsClaimed: accumulatedRewards.totalRewards,
      compoundedAmount: claimResult.compoundedAmount,
      newStakingBalance: claimResult.newBalance,
      nextOptimalClaimTime: this.calculateNextClaimTime(farmingPool, staker)
    };
  }
}

Advanced Protocol Features

Flash Loan Integration

class FlashLoanProvider {
  private saros: SarosSDK;

  async executeFlashLoan(
    asset: PublicKey,
    amount: number,
    flashLoanCallback: FlashLoanCallback
  ): Promise<FlashLoanResult> {
    // Initialize flash loan
    const flashLoan = await this.saros.initializeFlashLoan({
      asset,
      amount,
      fee: this.calculateFlashLoanFee(amount), // Dynamic fee based on utilization
      borrower: flashLoanCallback.borrower
    });

    try {
      // Execute borrower's strategy
      const callbackResult = await flashLoanCallback.execute({
        borrowedAmount: amount,
        asset,
        repaymentAmount: amount + flashLoan.fee,
        deadline: flashLoan.deadline
      });

      // Verify repayment
      if (callbackResult.repaymentAmount < flashLoan.requiredRepayment) {
        throw new Error('Insufficient repayment amount');
      }

      // Complete flash loan
      await this.saros.completeFlashLoan(flashLoan.id, callbackResult);

      return {
        success: true,
        borrowedAmount: amount,
        fee: flashLoan.fee,
        profitToUser: callbackResult.repaymentAmount - flashLoan.requiredRepayment,
        executionTime: callbackResult.executionTime
      };

    } catch (error) {
      // Flash loan failed, ensure proper cleanup
      await this.saros.cancelFlashLoan(flashLoan.id);
      
      return {
        success: false,
        error: error.message,
        partialResults: flashLoan.partialResults
      };
    }
  }

  async createArbitrageFlashLoan(
    arbitrageOpportunity: ArbitrageOpportunity
  ): Promise<ArbitrageResult> {
    const flashLoanCallback = new ArbitrageCallback({
      sourcePool: arbitrageOpportunity.sourcePool,
      targetPool: arbitrageOpportunity.targetPool,
      expectedProfit: arbitrageOpportunity.expectedProfit
    });

    return await this.executeFlashLoan(
      arbitrageOpportunity.asset,
      arbitrageOpportunity.optimalAmount,
      flashLoanCallback
    );
  }
}

Protocol Analytics and Insights

Comprehensive Protocol Metrics

class ProtocolAnalytics {
  async generateProtocolReport(): Promise<ProtocolReport> {
    const [
      liquidityMetrics,
      tradingMetrics,
      governanceMetrics,
      treasuryMetrics
    ] = await Promise.all([
      this.analyzeLiquidityHealth(),
      this.analyzeTradingActivity(),
      this.analyzeGovernanceActivity(),
      this.analyzeTreasuryHealth()
    ]);

    return {
      overview: {
        totalValueLocked: liquidityMetrics.totalTVL,
        dailyVolume: tradingMetrics.volume24h,
        activeUsers: tradingMetrics.uniqueUsers24h,
        protocolRevenue: treasuryMetrics.dailyRevenue
      },
      liquidity: {
        poolCount: liquidityMetrics.activePools,
        averagePoolSize: liquidityMetrics.averageTVL,
        liquidityUtilization: liquidityMetrics.utilizationRate,
        impermanentLoss: liquidityMetrics.avgImpermanentLoss
      },
      governance: {
        activeProposals: governanceMetrics.activeProposals,
        participationRate: governanceMetrics.voterParticipation,
        treasuryBalance: treasuryMetrics.totalBalance,
        monthlyBurn: governanceMetrics.tokenBurnRate
      },
      growth: {
        weeklyUserGrowth: this.calculateUserGrowth(7),
        weeklyTVLGrowth: this.calculateTVLGrowth(7),
        retentionRate: this.calculateUserRetention(30),
        marketShare: await this.calculateMarketShare()
      }
    };
  }

  async identifyGrowthOpportunities(): Promise<GrowthOpportunity[]> {
    const currentMetrics = await this.generateProtocolReport();
    const competitorAnalysis = await this.analyzeCompetitors();
    
    return [
      // TVL growth opportunities
      this.analyzePoolIncentives(currentMetrics.liquidity),
      
      // User acquisition opportunities  
      this.analyzeUserExperience(currentMetrics.growth),
      
      // Revenue optimization opportunities
      this.analyzeFeeOptimization(currentMetrics.overview),
      
      // Competitive positioning opportunities
      this.analyzeCompetitiveGaps(competitorAnalysis)
    ].flat();
  }
}

Multi-Asset Vault System

Institutional-Grade Asset Management

class MultiAssetVaultManager {
  private saros: SarosSDK;
  private riskManager: RiskManager;
  private rebalancer: AutoRebalancer;

  async createAssetVault(
    vaultConfig: VaultConfig
  ): Promise<VaultInstance> {
    // Create vault with multiple asset support
    const vault = await this.saros.createVault({
      name: vaultConfig.name,
      strategy: vaultConfig.strategy,
      acceptedAssets: vaultConfig.acceptedAssets,
      managementFee: vaultConfig.managementFee, // Annual %
      performanceFee: vaultConfig.performanceFee, // % of profits
      maxTVL: vaultConfig.maxTVL,
      minimumDeposit: vaultConfig.minimumDeposit
    });

    // Initialize asset allocation strategy
    await this.initializeStrategy(vault.address, vaultConfig.strategy);

    // Set up automated rebalancing
    await this.rebalancer.setup(vault.address, {
      rebalanceFrequency: vaultConfig.rebalanceFrequency || 86400, // Daily
      driftThreshold: vaultConfig.driftThreshold || 0.05, // 5%
      maxSlippage: vaultConfig.maxSlippage || 0.01 // 1%
    });

    return {
      vaultAddress: vault.address,
      shareTokenMint: vault.shareTokenMint,
      initialStrategy: vaultConfig.strategy,
      managementInfo: {
        manager: vaultConfig.manager,
        managementFee: vaultConfig.managementFee,
        performanceFee: vaultConfig.performanceFee
      }
    };
  }

  async deposit(
    vault: PublicKey,
    asset: PublicKey,
    amount: number,
    depositor: PublicKey
  ): Promise<DepositResult> {
    // Calculate current vault share price
    const sharePrice = await this.calculateSharePrice(vault);
    
    // Convert deposit amount to vault shares
    const sharesToMint = amount / sharePrice;

    // Execute deposit
    const result = await this.saros.vaultDeposit({
      vault,
      asset,
      amount,
      depositor,
      expectedShares: sharesToMint,
      slippageTolerance: 0.01
    });

    // Update vault allocation based on new deposit
    await this.updateAllocation(vault, asset, amount);

    return {
      sharesMinted: result.sharesMinted,
      newSharePrice: await this.calculateSharePrice(vault),
      depositValue: amount,
      vaultPosition: await this.getVaultPosition(vault, depositor)
    };
  }

  async withdraw(
    vault: PublicKey,
    shares: number,
    recipient: PublicKey,
    assetPreference?: PublicKey[]
  ): Promise<WithdrawalResult> {
    // Calculate withdrawal value
    const sharePrice = await this.calculateSharePrice(vault);
    const withdrawalValue = shares * sharePrice;

    // Determine optimal asset mix for withdrawal
    const assetMix = await this.calculateOptimalWithdrawalMix(
      vault,
      withdrawalValue,
      assetPreference
    );

    // Execute withdrawal
    const result = await this.saros.vaultWithdraw({
      vault,
      shares,
      recipient,
      assetMix,
      minimumValue: withdrawalValue * 0.99 // 1% slippage tolerance
    });

    return {
      withdrawnAssets: result.withdrawnAssets,
      totalValue: result.totalValue,
      burnedShares: shares,
      remainingPosition: await this.getVaultPosition(vault, recipient)
    };
  }
}

Automated Strategy Implementation

Dynamic Market Making Strategy

class AutomatedMarketMaker {
  private saros: SarosSDK;
  private strategyEngine: StrategyEngine;

  async deployMarketMakingStrategy(
    config: MarketMakingConfig
  ): Promise<StrategyDeployment> {
    // Initialize market making parameters
    const strategy = await this.strategyEngine.initialize({
      tradingPairs: config.pairs,
      liquidityDepth: config.liquidityDepth,
      spreadTarget: config.targetSpread,
      riskLimits: config.riskLimits,
      rebalanceFrequency: config.rebalanceFrequency
    });

    // Deploy liquidity across specified pairs
    const deployments = [];
    for (const pair of config.pairs) {
      const deployment = await this.deployPairLiquidity(pair, strategy);
      deployments.push(deployment);
    }

    // Start automated management
    await this.startAutomatedManagement(strategy.id, deployments);

    return {
      strategyId: strategy.id,
      deployedPairs: deployments.length,
      totalLiquidityDeployed: deployments.reduce((sum, d) => sum + d.value, 0),
      expectedDailyRevenue: this.estimateDailyRevenue(deployments),
      riskProfile: strategy.riskProfile
    };
  }

  async executeMarketMakingCycle(strategyId: string): Promise<CycleResult> {
    const strategy = await this.strategyEngine.getStrategy(strategyId);
    const marketConditions = await this.analyzeMarketConditions(strategy.pairs);

    // Adjust spreads based on volatility
    const spreadAdjustments = this.calculateSpreadAdjustments(
      marketConditions,
      strategy.targetSpread
    );

    // Rebalance liquidity based on trading activity
    const rebalanceOperations = await this.planRebalanceOperations(
      strategy,
      marketConditions
    );

    // Execute adjustments
    const results = await Promise.all([
      this.updateSpreads(strategy.id, spreadAdjustments),
      this.executeRebalancing(strategy.id, rebalanceOperations)
    ]);

    return {
      spreadsUpdated: results[0].updatedPairs,
      liquidityRebalanced: results[1].rebalancedPairs,
      newExpectedAPY: await this.calculateUpdatedAPY(strategy.id),
      riskAdjustment: this.assessRiskAdjustment(results)
    };
  }
}

Cross-Protocol Integration

Protocol-to-Protocol Communication

class CrossProtocolIntegration {
  async integrateWithExternalProtocol(
    externalProtocol: ExternalProtocol,
    integrationConfig: IntegrationConfig
  ): Promise<IntegrationResult> {
    // Create cross-protocol adapter
    const adapter = await this.saros.createCrossProtocolAdapter({
      externalProtocol: externalProtocol.address,
      protocolType: externalProtocol.type, // 'lending', 'options', 'perpetuals'
      integrationLevel: integrationConfig.level, // 'basic', 'advanced', 'full'
      sharedLiquidity: integrationConfig.shareliquidity || false
    });

    // Set up asset bridging if needed
    if (integrationConfig.assetBridging) {
      await this.setupAssetBridging(adapter.address, integrationConfig.bridgedAssets);
    }

    // Configure revenue sharing
    if (integrationConfig.revenueSharing) {
      await this.setupRevenueSharing(
        adapter.address,
        integrationConfig.revenueSharing
      );
    }

    return {
      adapterAddress: adapter.address,
      integrationLevel: integrationConfig.level,
      sharedAssets: adapter.sharedAssets,
      estimatedCrossProtocolVolume: await this.estimateCrossVolume(adapter),
      mutualBenefits: this.calculateMutualBenefits(externalProtocol, adapter)
    };
  }

  async optimizeCrossProtocolYield(
    integrations: IntegrationAdapter[]
  ): Promise<OptimizationResult> {
    // Analyze yield opportunities across integrated protocols
    const opportunities = [];
    
    for (const integration of integrations) {
      const yieldData = await this.analyzeIntegrationYield(integration);
      opportunities.push(...yieldData.opportunities);
    }

    // Sort by risk-adjusted yield
    opportunities.sort((a, b) => 
      (b.expectedYield / b.riskScore) - (a.expectedYield / a.riskScore)
    );

    // Execute top opportunities within risk limits
    const executedOpportunities = await this.executeYieldOptimization(
      opportunities.slice(0, 5) // Top 5 opportunities
    );

    return {
      opportunitiesAnalyzed: opportunities.length,
      opportunitiesExecuted: executedOpportunities.length,
      estimatedYieldImprovement: this.calculateYieldImprovement(executedOpportunities),
      riskAdjustment: this.calculateRiskAdjustment(executedOpportunities)
    };
  }
}

Enterprise Protocol Example

Complete DeFi Protocol Implementation

class ComprehensiveDeFiProtocol {
  private foundation: DeFiProtocolFoundation;
  private ammFactory: AMMPoolFactory;
  private governance: DAOGovernanceSystem;
  private vaultManager: MultiAssetVaultManager;
  private analytics: ProtocolAnalytics;

  async launchProtocol(launchConfig: LaunchConfig): Promise<LaunchResult> {
    // Phase 1: Initialize core protocol
    const protocolInstance = await this.foundation.initializeProtocol(launchConfig);

    // Phase 2: Create initial liquidity pools
    const initialPools = await Promise.all(
      launchConfig.initialPairs.map(pair => 
        this.ammFactory.createLiquidityPool(pair.tokenA, pair.tokenB, pair.fee)
      )
    );

    // Phase 3: Deploy farming incentives
    const farmingPools = await Promise.all(
      initialPools.map(pool =>
        this.deployLiquidityIncentives(pool.poolAddress, launchConfig.incentives)
      )
    );

    // Phase 4: Initialize governance
    await this.governance.initializeDAO(protocolInstance.governance);

    // Phase 5: Set up monitoring and analytics
    await this.analytics.startProtocolMonitoring(protocolInstance.protocolAddress);

    return {
      protocolAddress: protocolInstance.protocolAddress,
      governanceToken: protocolInstance.tokenMint,
      initialPools: initialPools.length,
      farmingPools: farmingPools.length,
      launchTime: Date.now(),
      estimatedTVLCapacity: launchConfig.tvlTarget,
      governanceParticipants: 0,
      status: 'launched'
    };
  }

  async manageProtocolGrowth(): Promise<GrowthReport> {
    // Continuous protocol optimization
    const growthOpportunities = await this.analytics.identifyGrowthOpportunities();
    
    // Execute top growth initiatives
    const executedInitiatives = [];
    for (const opportunity of growthOpportunities.slice(0, 3)) {
      const result = await this.executeGrowthInitiative(opportunity);
      executedInitiatives.push(result);
    }

    return {
      opportunitiesIdentified: growthOpportunities.length,
      initiativesExecuted: executedInitiatives.length,
      estimatedImpact: this.calculateGrowthImpact(executedInitiatives),
      nextOptimizationDate: Date.now() + 604800000 // 1 week
    };
  }
}

Success Metrics for DeFi Protocols

Track these key metrics to measure protocol success:

• Total Value Locked (TVL): Target steady growth >20% monthly
• Daily Active Users: Measure user engagement and retention
• Protocol Revenue: Track fee generation and sustainability
• Governance Participation: Measure community engagement
• Liquidity Efficiency: Monitor capital utilization rates

Building on Saros Main SDK gives you access to battle-tested DeFi primitives while maintaining the flexibility to innovate with new protocol designs.

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Next: Implement Advanced Analytics for deeper protocol insights, or explore Cross-Chain Integration to expand your protocol reach.