DeFi Moon - Covered Call Options Trading Platform

A decentralized covered call options trading platform built on Gnosis Chain, featuring ERC-1155 option tokens and 1inch Limit Order Protocol v4 integration for trustless trading.

🌟 Features

• Covered Call Options: Create and trade covered call options backed by GNO collateral
• ERC-1155 Option Tokens: Custom ERC1155 Proxy Implementation as Options are represented as tradeable ERC-1155 tokens
• 1inch Integration: Trustless orderbook using 1inch Limit Order Protocol v4
• Oracle-Based Settlement: Chainlink oracle integration for fair option settlement
• Pro-Rata Exercise: Sophisticated exercise and reclaim mechanics with accurate PnL tracking
• Multi-Role Architecture: Separate interfaces for option makers, takers, and administrators

🚀 Quick Start

Prerequisites

• Node.js 18+ and npm/yarn
• MetaMask or compatible wallet
• Gnosis Chain RPC

Installation

# Clone the repository
git clone https://github.com/skundu42/defi-moon
cd defi-moon

# Install dependencies
npm install

# Set up environment variables
cp .env.example .env.local

# Start the development server
npm run dev

Environment Configuration

Create a .env.local file with the following variables:

# WalletConnect Project ID (for RainbowKit)
NEXT_PUBLIC_WC_PROJECT_ID=your_walletconnect_project_id

# Network Configuration
NEXT_PUBLIC_CHAIN_ID=100
NEXT_PUBLIC_GNOSIS_RPC_URL=https://rpc.gnosis.gateway.fm


# ─── 1inch Limit Order Protocol v4 (Gnosis) ───────────────────────────────────
# LOP (settlement contract) – do not change on Gnosis
NEXT_PUBLIC_LOP=0x111111125421ca6dc452d289314280a0f8842a65


# Contract Addresses (deployed on Gnosis Chain)
NEXT_PUBLIC_VAULT_ADDRESS=0x42AD721db31C6eb65d8332BF0F7E26bff1eB9f6b
NEXT_PUBLIC_CALLTOKEN_ADDRESS=0x25D2203b0e4908594009A6e18b175f5996b08375
NEXT_PUBLIC_ERC1155_PROXY_ADDRESS=0x5EaF7a20901e87FD60E4414E82C1c7e58903F713
NEXT_PUBLIC_ORACLE_GNO_WXDAI=0x25bF72c741Ea8833154AC093f341D0A6434278d2

# Block number when vault was deployed (for faster event scanning)
NEXT_PUBLIC_VAULT_DEPLOY_BLOCK=12345678

# Token Addresses (optional overrides)
NEXT_PUBLIC_TOKEN_WXDAI=0xe91D153E0b41518A2Ce8Dd3D7944Fa863463a97d
NEXT_PUBLIC_TOKEN_USDC=0x2a22f9c3b484c3629090FeED35F17Ff8F88f76F0
NEXT_PUBLIC_TOKEN_GNO=0x9C58BAcC331c9aa871AFD802DB6379a98e80CEdb

📱 Application Structure

For Option Makers

Path: /maker

1. Series Management: Define new option series with custom strikes and expiry dates
2. Collateral Management: Deposit/withdraw GNO collateral
3. Option Minting: Mint ERC-1155 option tokens backed by collateral
4. Order Creation: Create 1inch limit orders to sell minted options
5. Settlement: Settle expired series and reclaim unused collateral

For Option Takers

Path: /taker

1. Browse Orderbook: View available ERC-1155 option orders
2. Buy Options: Fill limit orders to purchase option tokens
3. Portfolio Management: Track purchased options and their status
4. Exercise Options: Exercise profitable options at or after expiry

For Administrators

Path: /admin

1. Define Series: Create new option series (requires SERIES_ADMIN_ROLE)
2. Monitor Activity: View all defined series and their status
3. System Management: Pause/unpause contracts and manage roles

🏗️ Architecture

Smart Contracts

Core Contracts

• OptionsVault.sol: Main vault contract managing collateral, minting, and settlement
• CallToken.sol: ERC-1155 token representing option positions
• ERC1155Proxy.sol: 1inch-compatible proxy for ERC-1155 trading
• ChainlinkPriceAdapter.sol: Oracle adapter for GNO/WXDAI price feeds

Key Features

• Access Control: Role-based permissions for series creation and administration
• Pausable Operations: Emergency pause functionality for all user operations
• Reentrancy Protection: Guards against reentrancy attacks
• Pro-Rata Settlement: Fair distribution of exercise proceeds among option writers

Frontend Stack

• Next.js 14: React framework with App Router
• TypeScript: Type-safe development
• Tailwind CSS: Utility-first styling
• HeroUI: Modern component library
• Wagmi: React hooks for Ethereum
• RainbowKit: Wallet connection interface
• 1inch Protocol: Decentralized orderbook integration

Integration Layer

• 1inch Limit Order Protocol v4: Trustless order matching
• Chainlink Oracles: Reliable price feeds for settlement
• ERC-1155 Standard: Efficient option token representation
• Gnosis Chain: Low-cost, fast blockchain for DeFi

🔧 Development

Project Structure

├── app/                    # Next.js App Router pages
│   ├── admin/             # Admin interface
│   ├── maker/             # Option maker interface  
│   ├── taker/             # Option taker interface
│   ├── portfolio/         # Portfolio management
│   └── api/               # API routes for orderbook
├── components/            # React components
├── lib/                   # Utilities and integrations
│   ├── contracts.ts       # Contract addresses and ABIs
│   ├── oneInch.ts         # 1inch Protocol integration
│   ├── orderApi.ts        # Orderbook API client
│   └── token.ts           # Token definitions
├── smartcontracts/        # Solidity contracts
│   ├── src/core/          # Core option contracts
│   ├── src/oracle/        # Price oracle adapters
│   └── src/token/         # ERC-1155 token contract
└── hooks/                 # Custom React hooks

Building and Testing

# Development server
npm run dev

# Build for production
npm run build

# Start production server
npm start

# Type checking
npm run type-check

# Linting
npm run lint

Contract Development

# Navigate to smart contracts directory
cd smartcontracts

# Install Foundry dependencies
forge install

# Compile contracts
forge build

# Run tests
forge test

# Deploy contracts (configure deployment script first)
forge script script/Deploy.s.sol --rpc-url gnosis --broadcast

🔐 Security Features

Smart Contract Security

• OpenZeppelin Libraries: Battle-tested security primitives
• Access Control: Role-based permissions with admin controls
• Reentrancy Guards: Protection against reentrancy attacks
• Pausable Operations: Emergency stop functionality
• SafeERC20: Safe token transfer implementations

Frontend Security

• Type Safety: Full TypeScript implementation
• Input Validation: Comprehensive input sanitization
• Error Handling: Graceful error recovery and user feedback
• HTTPS Only: Secure communication in production

Economic Security

• Overcollateralization: Option writers must deposit full collateral
• Oracle-Based Settlement: Tamper-resistant price feeds
• Pro-Rata Distribution: Fair allocation of exercise proceeds
• Expiry Enforcement: Automatic option expiration

🎯 Usage Examples

Creating a Covered Call

1. Connect Wallet: Connect your wallet to Gnosis Chain
2. Deposit Collateral: Deposit GNO tokens to the vault
3. Define Series: Create a new option series (if admin) or select existing
4. Mint Options: Mint option tokens backed by your collateral
5. Create Order: List your options on the 1inch orderbook
6. Await Exercise: Options may be exercised if they finish in-the-money

Buying Options

1. Browse Orderbook: View available option orders
2. Select Options: Choose options based on strike, expiry, and premium
3. Fill Order: Purchase options using WXDAI, USDC, or other supported tokens
4. Monitor Position: Track your options in the portfolio section
5. Exercise if Profitable: Exercise in-the-money options after expiry

Settlement Process

1. Option Expiry: Options automatically expire at the set timestamp
2. Price Settlement: Oracle provides the settlement price
3. Exercise Period: Option holders can exercise profitable positions
4. Reclaim Collateral: Option writers reclaim unused collateral

🌐 Deployment

Contract Deployment

The smart contracts are deployed on Gnosis Chain at the following addresses:

• OptionsVault: 0x42AD721db31C6eb65d8332BF0F7E26bff1eB9f6b
• CallToken: 0x25D2203b0e4908594009A6e18b175f5996b08375
• ERC1155Proxy: 0x5EaF7a20901e87FD60E4414E82C1c7e58903F713
• Oracle: 0x25bF72c741Ea8833154AC093f341D0A6434278d2

Frontend Deployment

The application can be deployed to any modern hosting platform:

# Build for production
npm run build

# Deploy to Vercel
vercel deploy

# Or deploy to other platforms
npm run start

🔗 Integration with 1inch

Order Creation

Options are traded using 1inch Limit Order Protocol v4:

1. ERC-1155 Extension: Custom extension data for option token identification
2. Proxy Integration: ERC1155Proxy contract enables ERC20-style trading
3. Order Signing: EIP-712 signatures for trustless order creation
4. Orderbook Storage: Decentralized order storage and matching

Order Execution

1. Order Discovery: Browse orders through the integrated orderbook
2. Price Validation: Real-time pricing and liquidity information
3. Atomic Settlement: Trustless execution via 1inch smart contracts
4. Partial Fills: Support for partial order execution