System Architecture

Core Contract Modules

The APACX Protocol implements a modular architecture with specialized contracts:

Contract	Function	Technical Notes
Vat	Core ledger tracking collateral and debt positions	Maintains a global accounting system with all vault positions
Spot	Calculates collateral valuations	Applies collateral factors to oracle prices
Jug	Stability fee accrual mechanism	Uses compound interest formula to accumulate fees continuously
Dog	Coordinates liquidation process	Replaces the older Cat contract with improved efficiency
Clip	Dutch auction for liquidated collateral	Replaces the older Flip auction with fixed price decreases
Flap	Surplus auction distributing excess system value	Activated when system builds significant surplus
Flop	Debt auction to recapitalize the system	Activated during shortfalls to restore system solvency
End	Coordinates emergency shutdown	Ensures fair distribution of remaining collateral

These contracts interact through a carefully designed permission system that ensures security while enabling modular upgrades.

Collateral Types

The protocol accepts various assets as collateral, each with risk parameters calibrated to its specific characteristics:

• Major Stablecoins: USDC, USDT with dynamic Liquidation Ratio, Debt Ceiling, and Stability Fee parameters.

• PHP-Pegged Stablecoins: Native tokens maintaining a 1:1 PHP peg through algorithmic or backed mechanisms.

• Regulated Assets: Government-issued debt or regulated financial instruments, subjected to enhanced due diligence and verification.

Each collateral type is managed in a separate ilk (collateral class) with independent risk parameters.

Keeper Network

The decentralized keeper network ensures protocol automation:

• Price Feed Updates: Keepers monitor and submit Chainlink oracle updates to the Pip contract.

• Liquidation Processing: Identifies unhealthy vaults and triggers Dog to initiate liquidation.

• Auction Participation: Bids in collateral auctions to ensure efficient collateral liquidation.

• System Maintenance: Performs routine operations like debt ceiling adjustments.

Keepers are economically incentivized through auction participation fees and system rewards. The network operates without central coordination, increasing system resilience. The APACX Platform runs its own Keepers to ensure the safety and stability of the platform, especially after the initial deployment when other Keepers will not exist on the chain.

External Integrations

Integration	Purpose	Technical Specifications
Chainlink Oracles	Price feed aggregation	Maximum heartbeat of 24 hours with deviation threshold of 1%
Ethereum Mainnet	Primary execution environment	EVM-compatible, gas optimization for complex operations
Tron Network	PHT Bridged environment	Lower fee structure, cross-chain interoperability