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Accounting & Recordkeeping

This section details how the Fund module of the FRAG-22 architecture meticulously tracks every operation, ensuring transparent, accurate, and reliable management of user funds. The structure described here directly reflects the logic implemented in the FRAG-22 codebase.

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On-chain Accounting Structure

The Fund module maintains precise records of all operations—deposits, withdrawals, asset allocations, and balance adjustments. Each transaction is systematically accounted for, ensuring accurate financial tracking and user transparency.

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Key Accounting Components:

  • User Fund Accounts
    • Maintains individual user balances and withdrawal states.
    • Reflects users’ deposited assets, receipt token balances, and pending withdrawals.
  • Receipt Tokens
    • Tokens issued to users upon deposits.
    • Represent proportional ownership of deposited assets.
    • Burned upon withdrawal, reflecting accurate ownership and fund valuation.
  • Fund Reserve Account
    • Manages liquid assets held directly within the Fund for quick withdrawals.
    • Acts as the primary liquidity buffer for immediate transactions.
  • Fund Treasury Account
    • Captures fees and protocol-specific funds separate from user assets.
  • Withdrawal Batch Account
    • Temporarily aggregates withdrawal requests into grouped batches.
    • Contains metadata such as timestamps, total batch amounts, and processing status.
  • Reward Account
    • Separately maintains accrued rewards generated by yield sources.
    • Linked to user reward accounts for accurate claim tracking.

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Accounting Procedures & Data Flow

The accounting processes within FRAG-22 are designed around explicit, verifiable flows of asset data. Each action triggers a series of structured record updates:

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Deposit Accounting Process:

  1. Deposit Validation
    • Verify user identity, deposit asset validity, and transfer authenticity.
  2. Receipt Token Issuance
    • Mint new receipt tokens proportional to the user’s deposited assets.
  3. Update User Fund Account
    • Increase the user’s balance according to deposited assets and issued receipt tokens.
  4. Update Fund Reserve Account
    • Add deposited assets directly to liquidity reserves.

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Withdrawal Accounting Process:

  1. Withdrawal Request Logging
    • Upon user request, the system logs:
      • User identifier
      • Requested amount & asset
      • Timestamp & withdrawal request ID
  2. Batch Creation
    • Group withdrawal requests into batches based on scheduled intervals or request volumes.
  3. Liquidity Verification & Adjustment
    • Check available reserve liquidity:
      • If sufficient, proceed immediately.
      • If insufficient, trigger asset rebalancing from yield sources.
  4. Receipt Token Burning
    • Receipt tokens corresponding to the withdrawal are burned, accurately reducing user proportional fund ownership.
  5. Update User Fund Account
    • Decrease user’s fund balance after successful withdrawal settlement.
  6. Withdrawal Settlement
    • Update Fund Reserve Account to reflect outflow.
    • Finalize the batch, updating batch status records.

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Data Integrity & Verification

Every accounting update is performed through structured, verifiable steps ensuring transactional integrity and consistency:

  • Sequential Operations
    • Transactions follow a strict sequence: validation → execution → record update.
    • Each step completion acts as a prerequisite for subsequent operations, maintaining data consistency.
  • Real-time Balance Calculation
    • Immediately updates balances following any asset flow (deposits, withdrawals, allocations).
    • Ensures users always have up-to-date visibility into their holdings via the user interface.

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Example Scenario of Recordkeeping (User Deposit & Withdrawal):

  1. User deposits 100 SOL
    • Deposit validated.
    • 100 SOL added to Fund Reserve.
    • User account updated to reflect balance increase.
    • Receipt tokens issued proportionally.
  2. User requests withdrawal of 50 SOL
    • Request validated and logged in Withdrawal Queue.
    • Withdrawal Batch processes the request upon threshold/time trigger.
    • Liquidity checked, and sufficient funds found in reserve.
    • 50 SOL transferred from Fund Reserve to the user.
    • User’s receipt tokens burned proportionally (representing withdrawn assets).
    • Records updated accurately to reflect the transaction.

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Recordkeeping Auditability & Transparency

The architecture guarantees auditability through detailed recordkeeping procedures:

  • Each operation (deposit, withdrawal, reward accrual) creates immutable accounting entries, providing clear transaction histories.
  • Users have continuous access to their account status, transaction history, and balances through decentralized application interfaces, ensuring transparency and trust.