Upside Vault
The vault is the central pool that holds assets provided by liquidity providers. For example, an ETH vault holds contributed ETH which is used to back the exposure of users who are renting ETH upside. The vault keeps track of total supplied assets and how much is currently allocated to open positions. It also handles distribution of streaming fees to LPs, effectively increasing their balances or rewarding them over time.Position Manager / Smart Contracts
When a user opens a position, a specific position contract (or an entry in a contract registry) is created to track that position’s details. This includes information like the asset type, the size of exposure, the entry price (for reference), and links to the user’s account for streaming payments. The position manager ensures that each position’s value can be calculated and that it can be closed properly. It acts as the ledger for all open positions in the system.Superfluid Payment Stream
Lora integrates with Superfluid, a protocol enabling real-time money streams on Ethereum-compatible networks. Instead of the user manually paying an interest fee periodically, Superfluid allows Lora to set up a continuous payment flow from the user to the vault. This stream can be started, adjusted, or stopped programmatically. The benefit of using Superfluid is precision (charging by the second) and user convenience (no need for constant transactions; one transaction can initiate a long-lived stream). The streaming mechanism is core to Lora’s UX, making the payment of fees feel seamless and “streamed” just like the service being used.Pricing Oracle
Accurate and up-to-date price feeds are critical. Lora uses oracle services (decentralized price oracles, potentially Chainlink or MegaETH’s native oracle system) to know the current market price of each supported asset. These price feeds are used to value positions (for calculating profits/losses when closing) and may also influence the fee rate. The oracle ensures that when you close a position, the protocol knows exactly how much the asset moved in price since you opened it, so it can settle the correct amount. #Interest Rate Model Lora’s protocol includes a formula or algorithm that determines the rent rate (interest rate) for each asset’s exposure. This model typically considers utilization (what percent of the vault’s liquidity is in use providing exposure) as well as base interest parameters. For example, the rate model might ensure there’s a minimum fee rate and then increase the rate as utilization rises (to attract more liquidity and balance risk). It might also factor in the inherent volatility of the asset or other market data to set an appropriate cost for the upside. The specifics of this model can be adjusted via governance or predefined in the protocol, but the key is that it keeps the system solvent and attractive for both sides by finding an equilibrium rent price.Settlement & Liquidation Module
While we emphasize “no liquidations” for user positions in the traditional sense, the protocol still needs a mechanism to handle position closures safely. The settlement module is responsible for executing the close of a position: calculating the final payout to the user (if any profit) or the loss, returning any remaining funds, and updating the vault balances. In rare cases, if a user’s streaming payment fails (e.g., they run out of funds or deliberately stop the stream without formally closing the position), this module will detect the interruption and automatically close the position using the last known prices. This ensures the vault is not exposed to an open position without compensation. From the user’s perspective, this is equivalent to the position simply ending when they stopped paying – there’s no penalty other than losing the exposure.Governance (future)
Although not a core part of the initial mechanism, it’s worth noting that Lora Finance is likely to evolve towards community governance for parameters like interest rate models, supported assets, fee structure, etc. A governance module (potentially involving a governance token or multi-sig of core team and stakeholders) would allow for decentralized control and upgrades of the system over time.All these components work together in a trustless way. When you interact with Lora Finance, you are engaging with this set of smart contracts: locking funds in the vault, creating a position record, initiating a Superfluid stream, etc., all automated without needing to trust a human intermediary. This architecture is what enables Lora’s novel user experience on the frontend.