OVERVIEW
What is the Flywheel Protocol?
Flywheel Protocol is modular, composable reward infrastructure for tokenized ecosystems. It provides a standardized five-layer architecture that transforms on-chain revenue into per-second streaming rewards — with no inflation, no emissions, and full oracle verification.
Design Principles
1. Modularity
Every layer is self-contained with clearly defined interfaces. Projects can adopt the full stack or integrate individual layers into existing infrastructure. No vendor lock-in — swap any component without affecting the rest.
2. Real Yield Only
Flywheel never mints inflationary rewards. Every reward token distributed to users was first purchased on the open market using real protocol revenue. What you claim is backed by actual on-chain value.
3. Oracle-Verified Settlement
Every conversion from revenue tokens to reward tokens passes through oracle validation. Chainlink price feeds ensure fair market rates. Transactions that produce prices outside acceptable slippage bounds revert on-chain.
4. Per-Second Streaming
Rewards are not distributed at epoch boundaries. They stream continuously, accruing every second based on each depositor's share of the total pool. This eliminates timing games and creates fair, predictable yields.
5. Composable Interfaces
Every contract exposes standard ERC-20, ERC-4626, or custom interfaces. Build on top of Flywheel — create derivative products, auto-compounders, or analytics dashboards without permission.
6. Non-Custodial
Users retain control of their deposit receipts. LP positions are represented as NFTs. No admin keys control user funds. Withdrawal requests are processed transparently on-chain.
How Flywheel Differs
| Feature | Traditional Staking | Flywheel Protocol |
|---|---|---|
| Reward Source | Inflation / emissions | Real protocol revenue |
| Distribution | Per-epoch snapshots | Per-second streaming |
| Oracle Protection | None or centralized | Chainlink-verified conversions |
| Architecture | Monolithic | Five composable layers |
| Asset Flow | Mint → distribute | Collect → convert → settle |
| Custody | Often custodial | Fully non-custodial |
| Penalties | Slashing | Configurable burn penalty |
Reward Lifecycle
Revenue Generation
On-chain activity generates fees, royalties, or yield. These flow into the Revenue Sources layer.
Collection
The Collection Layer aggregates revenue from all sources into a unified pool, ready for routing.
Conversion
The Conversion Router swaps collected assets for the reward asset via DEX aggregators, validated by oracles.
Accounting
Reward Accounting tracks per-second accrual for every depositor. Updates are gas-efficient and continuous.
Settlement
Users claim accumulated rewards from the Settlement Vault. Penalties apply for early withdrawal.