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RugSafe Protocol - Paper

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RugSafe is a cutting-edge multichain protocol designed to address and mitigate rug-pull risks in decentralized finance (DeFi). By transforming rugged tokens into opportunities, the protocol leverages cryptographic security measures, economic incentives, and innovative mechanisms to protect users while creating new financial instruments. RugSafe redefines recovery and resilience in DeFi, enabling users to secure their assets, recover losses, and engage in advanced financial operations.

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Protocol Overview

RugSafe integrates recovery mechanisms and financial instruments to empower DeFi users:

  1. Vault Mechanism: Securely deposit rugged tokens to receive anti-coins, which inversely correlate to the token’s value.
  2. Perpetual Contracts: Advanced trading instruments with collateralized leverage and robust liquidation processes.
  3. Decentralized Exchange (DEX): Facilitates trading of rugged tokens, anti-coins, and other ecosystem assets.
  4. Rug Detection: Real-time mechanisms to identify and mitigate potential rug pulls.
  5. Anti-Coin Dynamics: Implements an inverse logarithmic pegging model to stabilize and hedge rugged token value declines.

Key Features

Vaults

  • Token Recovery: Deposit rugged tokens to mint anti-coins.
  • Anti-Coins: Inversely pegged to rugged tokens, offering protection and stability.
  • Secure Registry: Vaults are tracked across blockchains in a unified registry.

Perpetuals

  • Leverage Trading: Open long or short positions with collateralized assets.
  • Liquidation Mechanisms: Secure systems to manage under-collateralized positions.
  • Advanced Collateral Management: Add or adjust collateral dynamically.

Decentralized Exchange (DEX)

  • Trading Infrastructure: Swap rugged tokens, anti-coins, and stable assets.
  • Market Stability: Enforces inverse logarithmic pegging between rugged tokens and anti-coins.
  • Liquidity Incentives: Rewards liquidity providers for maintaining balanced markets.

Rug Detection Mechanisms

  • Liquidity Monitoring: Detects sudden liquidity changes signaling potential rug pulls.
  • Proactive Interventions: Executes protective actions such as front-running or sandwiching to secure assets.
  • Mitigation Systems: Allows users to define automated intents for managing risky positions.

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