Colateral-X

RWA Lending Protocol on Arbitrum Stylus

Unlocking $1.8T in SME liquidity using Rust-based asset valuation on-chain.

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The Problem

Small and medium enterprises (SMEs) in Latin America generate 60% of GDP yet face a $1.8 Trillion financing gap. Banks require real estate collateral. SMEs own movable assets — machinery, trucks, inventory — that traditional DeFi cannot safely value on-chain due to EVM gas limits on complex financial math.

The Solution

Colateral-X is an NFT-collateralized lending protocol that uses Arbitrum Stylus to run a Rust/WASM valuation engine on-chain. This engine computes real-time asset depreciation, risk scoring, and LTV calculations at ~99.9% lower gas cost than equivalent Solidity. SMEs tokenize their real-world assets as NFTs and receive instant USDC loans.

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Architecture

flowchart LR
    subgraph Frontend["Frontend (React 19 + Vite)"]
        UI[DApp Interface]
    end

    subgraph EVM["EVM Layer (Solidity 0.8.24)"]
        LP["LendingPool.sol\n(Ownable + ReentrancyGuard)"]
        NFT["MockNFT.sol\n(ERC-721 + Asset Metadata)"]
        USDC["MockUSDC.sol\n(ERC-20 Stablecoin)"]
    end

    subgraph Stylus["Stylus Layer (Rust → WASM)"]
        SV["StylusValuator.rs\n(Depreciation + Risk Engine)"]
    end

    UI -->|"1. Approve NFT"| NFT
    UI -->|"2. depositCollateralAndBorrow()"| LP
    LP -->|"Transfer NFT"| NFT
    LP -->|"3. calculateCurrentValue()"| SV
    SV -->|"Risk-Adjusted Value"| LP
    LP -->|"4. Transfer USDC (LTV 60%)"| USDC
    USDC -->|"Loan Disbursed"| UI

    style Stylus fill:#1a1a2e,stroke:#00FF88,stroke-width:2px,color:#00FF88
    style EVM fill:#1a1a2e,stroke:#12AAFF,stroke-width:2px,color:#12AAFF
    style Frontend fill:#1a1a2e,stroke:#A855F7,stroke-width:2px,color:#A855F7

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Why Stylus?

Capability	Solidity (EVM)	Stylus (Rust/WASM)
Depreciation Model	Simple linear only	Non-linear curves + residual floors
Gas Cost per Valuation	~$50	~$0.04
Arithmetic Safety	Unchecked by default	Rust checked arithmetic
Complex Math	Expensive loops	Native WASM performance
Memory Safety	Manual mgmt	Compile-time guarantees

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Deployed Contracts (Arbitrum Sepolia)

Contract	Address	Explorer
LendingPool	0xFc9f8c4107c6d4c2AFBdB7D25A30447FaB63b9bC	View
StylusValuator	0x023223d7b651a007dc42980cb9ca75f1e795eee1	View
MockUSDC	0x265e31a371eFdDC5E6922E68dEaf5045E57f8429	View
MockNFT	0xAb78688e3B83f56c58bDf7D2520F5cA590EcDB2d	View

Network: Arbitrum Sepolia (Chain ID: 421614)
Deployer: 0x66603e1b70cC600Cf2eb0aA777F66b8bCB63921a
Stylus Contract: Cached in ArbOS for optimized gas

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Features

15 Real-World Asset Classes

Tractors, GPU clusters, solar farms, mining trucks, MRI machines, container fleets — each with unique depreciation curves, risk ratings (AAA to B+), and sector classification.

Rust Risk Engine (Stylus/WASM)

The valuation engine computes:

• Time-based depreciation with residual value floors (10%)
• Risk-adjusted discounts for high-risk assets (score > 50)
• Batch valuations for portfolio-level analysis
• Depreciation schedules for 10-year asset lifecycle projections

Institutional Dashboard

Bloomberg Terminal-inspired interface with 5 sections:

• Dashboard — TVL, active loans, gas savings KPIs
• Market — Filterable asset grid with sector tags
• Risk Engine — Sector distribution, risk matrix, live Stylus feed
• Governance — DAO proposals with on-chain voting
• Settings — MockUSDC faucet, debug console, config

Security

• OpenZeppelin Ownable + ReentrancyGuard
• CEI pattern (Checks → Effects → Interactions)
• Immutable contract references
• Zero-value valuation revert protection

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Repository Structure

CollateralX/
├── stylus-core/          # Rust/WASM valuation engine
│   ├── src/
│   │   ├── lib.rs        # Stylus contract entrypoint
│   │   └── valuation.rs  # Pure business logic (206 lines)
│   ├── Cargo.toml
│   └── rust-toolchain.toml
│
├── evm-contracts/        # Solidity smart contracts
│   ├── contracts/
│   │   ├── LendingPool.sol          # Core lending logic (231 lines)
│   │   ├── interfaces/IStylusValuator.sol
│   │   └── mocks/
│   │       ├── MockUSDC.sol         # ERC-20 test token
│   │       └── MockNFT.sol          # ERC-721 with asset metadata
│   ├── scripts/deploy.js
│   └── hardhat.config.js
│
├── frontend/             # React 19 + TypeScript + Vite 6
│   ├── src/
│   │   ├── App.tsx                  # Landing page
│   │   ├── components/
│   │   │   ├── DashboardLayout.tsx  # Sidebar + topbar shell
│   │   │   └── LoanDashboard.tsx    # 5-section terminal UI
│   │   ├── contracts.ts             # ABIs + deployed addresses
│   │   └── wagmi.ts                 # Chain config
│   └── package.json
│
└── README.md

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Getting Started

Prerequisites

Tool	Version	Purpose
Node.js	≥ 18	Frontend + Hardhat
Rust	nightly-2025-06-01	Stylus contracts
cargo-stylus	0.5.7+	Deploy WASM contracts
MetaMask	Latest	Wallet connection

1. Clone & Install

git clone https://github.com/your-org/CollateralX.git
cd CollateralX

2. Deploy Stylus Valuator (Rust)

cd stylus-core
cargo stylus deploy \
  --private-key-path .key \
  --endpoint "https://sepolia-rollup.arbitrum.io/rpc" \
  --no-verify

3. Deploy EVM Contracts (Solidity)

cd evm-contracts
npm install
# Set PRIVATE_KEY in .env
npx hardhat run scripts/deploy.js --network arbitrumSepolia

4. Run Frontend

cd frontend
npm install
npm run dev
# Open http://localhost:5173

5. Test the Flow

1. Connect MetaMask to Arbitrum Sepolia
2. Go to Settings → Click "Mint 100K USDC"
3. Go to Market → Select any asset
4. Click "Request Loan" → Approve NFT → Confirm Borrow
5. Observe USDC disbursed to your wallet

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How It Works (Technical Flow)

User calls depositCollateralAndBorrow(tokenId)
  │
  ├─ 1. NFT.safeTransferFrom(user → pool)
  │
  ├─ 2. NFT.assetMetadata(tokenId)
  │     → returns (assetType, initialValue, purchaseDate, riskScore)
  │
  ├─ 3. StylusValuator.calculateCurrentValue(...)     ← Rust/WASM
  │     → Depreciation curve + risk adjustment
  │     → Returns currentValue in USDC units
  │
  ├─ 4. loanAmount = currentValue × 60% (LTV)
  │
  ├─ 5. Verify pool liquidity ≥ loanAmount
  │
  ├─ 6. Create Loan record (state update FIRST — CEI)
  │
  └─ 7. USDC.transfer(user, loanAmount)

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Judge's Quick Guide

Step	Action	Expected Result
1	Get Sepolia ETH	Faucet
2	Connect wallet	Address shown in topbar, "Arbitrum Sepolia" green indicator
3	Mint USDC	Settings → "Mint 100K USDC" → MetaMask confirms
4	Browse Market	15 assets across 6 sectors with real Unsplash photos
5	Open Asset Modal	See valuation, Contract Logic tab shows Stylus vs Solidity
6	Request Loan	Approve NFT → Borrow → USDC transferred
7	Check Arbiscan	Internal tx from LendingPool → StylusValuator visible

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Tech Stack

Layer	Technology
Smart Contracts	Solidity 0.8.24, Arbitrum Stylus SDK 0.10.0 (Rust)
Framework	Hardhat 2.28, OpenZeppelin 5.4
Frontend	React 19, TypeScript 5.6, Vite 6.4, Tailwind CSS v4
Web3	Wagmi v2, RainbowKit v2, viem v2
UI	lucide-react, framer-motion
Network	Arbitrum Sepolia (Chain ID: 421614)

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Roadmap

Phase	Timeline	Milestone
v1.0	Q1 2026	Hackathon MVP — Stylus valuator + LendingPool + Dashboard
v1.5	Q2 2026	Chainlink CCIP for cross-chain collateral
v2.0	Q3 2026	Legal wrapper integration (Kleros arbitration)
v3.0	Q4 2026	Arbitrum One mainnet launch

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Team

Built by the Colateral-X team for the Arbitrum Stylus Buildathon.

License

MIT