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Whitepaper & research

These are the canonical research artifacts the protocol is built on. They live in the rai-dollar/core2 repository under papers/. This page summarizes what each is and points at it; we do not reproduce derivations here.

The Liquity whitepaper​

Liquity Whitepaper rev. 0.3: papers/whitepaper/Liquity Whitepaper rev. 0.3.tex.

The foundation. Defines the trove model, the Stability Pool, redistribution, and the redemption-as-floor mechanism that RAI Dollar builds on. Everything in Borrowing, Liquidation paths, and the unshielded portion of Redemption mechanism traces back to this paper.

If you want a primer on:

  • ICR / TCR / MCR / CCR;
  • the offset-vs-redistribution liquidation choice;
  • why the Stability Pool's depositors get collateral at a discount;
  • why redemption creates a price floor and what the arbitrage looks like.

Read the relevant section of this paper.

Efficient order-preserving redistribution of troves​

papers/Efficient_Order-Preserving_Redistribution_of_Troves.pdf (LaTeX source in same directory).

Describes the algorithm Rewards.sol uses to track per-trove pending redistribution rewards in O(1) per trove. The key trick is two accumulators (L_RDDebt, L_Collateral) plus per-trove snapshots, so settlement is a single multiplication. This is what makes redistribution scalable in a multi-thousand-trove branch.

Read this if you're auditing Rewards.sol, working on a subgraph that needs to mirror trove state, or trying to understand why redistribution doesn't cost gas proportional to active-trove count.

Scalable reward distribution with compounding stakes​

papers/Scalable_Reward_Distribution_with_Compounding_Stakes.pdf (LaTeX source in same directory).

The math behind compounding rewards in the Stability Pool and in FEE/LP staking. Same conceptual pattern, accumulator + snapshot, but extended to handle stake balances that change as rewards accrue (e.g. SP deposits shrinking through liquidation).

Read this if you're auditing StabilityPool.sol, FEEStaking.sol, or LPStaking.sol, or implementing an off-chain reward calculator.

Scenario PDFs​

Four public scenario walkthroughs of TCR-drop attack/stress paths, all in papers/:

FileWhat it covers
SCENARIO 1_ TCR drop via price sandwich + opening huge Trove (public).pdfA specific manipulation pattern using a price sandwich plus a large new trove to drive TCR down.
SCENARIO 2_ TCR drop via underwater debt + redemption + redistribution (public).pdfTCR drop via the interaction of underwater debt, redemption, and redistribution.
SCENARIO 3_ TCR drop via underwater debt + opening huge Trove + redistribution (public).pdfSame family of stresses with a different ordering.
SCENARIO 4_ TCR drop via underwater debt + opening huge Trove + redemption (public).pdfUnderwater debt plus opening a huge trove plus redemption pressure.

These are useful if you're modeling how the system responds to adversarial activity, designing a keeper bot that should react to these patterns, or auditing recovery-mode and shutdown logic.

How this site treats the papers​

  • We point at them whenever the topic shows up.
  • We summarize implications in plain language so users don't need to read the math.
  • We do not reproduce proofs or simulation walks here. If you want them, read the paper.

For the operating parameters of the deployed protocol (controller gains, deadbands, dwell times, etc.) the source of truth is the contract code, not the papers. The papers establish the math and motivate the parameter ranges; the code commits to specific values inside those ranges. See Risks and the contract-level pages for current values.