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Protocol Overview

Lucent lets users borrow starUSD against XLM collateral. A borrower deposits XLM into the protocol, creates Trove debt, and receives newly minted starUSD. The loan is open-term, so the borrower can repay and withdraw collateral at any time if the position remains valid.

The protocol is inspired by Liquity v2 and Ebisu's collateralized debt position design. Lucent keeps the fixed-rate, user-selected interest model and adapts the implementation to Stellar assets, Soroban authorization, Soroban storage, and Stellar wallet flows.

System Model

Lucent has global contracts and per-collateral branches.

  • Global contracts coordinate collateral branch registration, starUSD mint authority, protocol security controls, and interest routing.
  • A collateral branch contains the contracts, risk parameters, oracle adapter, pools, Trove accounting, and redemption ordering for one collateral asset.
  • The launch branch supports XLM collateral.
  • Future collateral branches are added through governed deployment and registration.

Borrowing Flow

When a borrower opens a Trove:

  1. The borrower authorizes the operation through a Stellar wallet.
  2. BorrowerOperations validates collateral, requested debt, oracle price, minimum debt, collateral ratio, receiver, trustline, interest rate, debt cap, and branch status.
  3. XLM transfers into the ActivePool.
  4. TroveManager records the Trove debt, collateral, ownership, accounting snapshots, and redemption ordering.
  5. StarUsdController mints the exact starUSD amount created as debt.

Why Fixed Rates

Borrowers choose the annual fixed rate they are willing to pay. The selected rate has two effects:

  • It determines how much interest the borrower owes over time.
  • It determines redemption priority, with lower-rate Troves redeemed first.

This creates a market-based tradeoff. A lower rate reduces borrowing cost but increases redemption exposure. A higher rate costs more but gives better protection from redemptions.

Peg and Solvency

starUSD stays backed because minting and debt creation are the same operation. Lucent does not mint starUSD without recording debt, and it does not record debt unless collateral was deposited and validated against the oracle price.

Backing is protected by:

  • Overcollateralization: Troves begin with more collateral value than debt.
  • Liquidations: Troves at or below the minimum collateral ratio can be closed.
  • Redemptions: starUSD holders can exit into collateral when starUSD trades below peg.