Workflow
The application logic is built on two main components:
The lending and delegation flow, which handles all token-delegation processes.
The reward distribution logic.
Lending and Delegation Flow
The lending and delegation flow lends assets from the PoEL vault to users based on the collateral they have deposited in the IntraLayer vaults, and directly delegates the borrowed $SUPRA to the system’s delegation pools. Throughout this process, the system maintains accounting to ensure the delegated amount is periodically updated according to changes in the amount and price of assets deposited in the IntraLayer vaults. It also tracks lifecycle updates of the delegated amount and performs other operations to act as an equitable delegating agent on behalf of the user.
Reward Distribution Logic
The reward allocation logic first calculates the total staking rewards earned by the user of PoEL. It then allocates these rewards across iAssets based on the amount of the underlying asset deposited as collateral and asset-specific characteristics (e.g., desirability score, price, collateralization rate). Finally, each iAsset holder’s rewards are determined by the quantity of iAssets they hold and the duration for which they have held them in their account.
Workflow
To provide a high-level understanding of the flow, we provide an illustrative example of an end-to-end process for depositing ETH and minting iETH.
Depositing ETH: Users deposit ETH into the Supra’s IntraLayer Vault on Ethereum
Cross-chain Relay: The SupraNova cross-chain bridge relays deposit events to PoEL modules on Supra.
Minting iETH (InterLayer ETH): Users can mint iETH (InterLayer ETH) on the Supra blockchain through a two-step process:
First, the system pre-mints iAssets to the user’s account.
After two epochs, the user finalises the mint, and the iETH is credited to their account. Minting may also be performed by backend automation, but it is ultimately the user’s responsibility to mint their iAssets to start earning rewards.
Collateral Management: In the background, PoEL uses the deposited ETH as collateral to lend $SUPRA and delegate it across multiple delegation pools in Supra’s Proof-of-Stake system, acting as a delegator on behalf of the user.
The delegated amount depends on ETH’s oracle price and collateralization rate.
If ETH’s value rises relative to $SUPRA, PoEL increases delegation; if it falls, PoEL reduces delegation.
This ensures PoEL’s total delegated $SUPRA reflects the (nominal) collateral value held in the IntraLayer Vaults.
Staking Rewards: By securing the network, PoEL generates staking rewards in $SUPRA,
iETH holders can withdraw rewards proportional to their balance and holding duration.
Reward claim rights automatically transfer with iETH ownership.
Withdrawals follow three steps:
update_rewards(allocate accrued rewards), to allocate accrued rewards to the userclaim_rewards(submit intent), to submit an intent to withdraw the allocated rewards.withdraw_rewards(available after the lockup cycle), to complete withdrawal after the lockup cycle.
iETH Deployment: Once received, iETH can be freely used, including in third-party DeFi liquidity pools. The system incentivises users to deploy their iAssets to Supra's DeFi ecosystem, where active participation such as providing liquidity contributes to overall capital efficiency.
(Coming Soon) ETH Redemption: After SupraNova reverse bridge becomes available(that can relay messages from Supra to Ethereum), users will be able to redeem iETH to withdraw the corresponding ETH from the IntraLayer Vault. Overall, redemption is a two-step process:
Redemption request: The user submits a request, and the corresponding iETH is burned to signal withdrawal intent.
Redemption: After the lockup cycle, PoEL withdraws tokens from delegation pools to maintain collateral alignment. Users can then withdraw: SupraNova relays the redemption order to the IntraLayer Vault, which transfers the underlying asset to the user’s address.
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