Taikodrome Specification - Central Architecture Reference

TAIKODROME.spec.md

Taikodrome Ideas Spec

Overview

Taikodrome is a fork of Aerodrome designed to bootstrap a new DEX economy on Taiko using $TAIKO as the exogenous token. This specification serves as the central reference for all architectural decisions and modifications required.

System Architecture

The architecture diagram above illustrates the complete token flow and governance structure of Taikodrome.

Core Components

1. TD Bonding Contract

The bonding contract facilitates the one-way conversion of $TAIKO into max-locked veTD positions with competitive early-bird discounts.

Key Features:

• Bootstrap phase: 1:1 TAIKO:TD exchange rate
• Market phase: TWAP-based pricing with discounts
• Illiquidity discount + Early adopter bonus
• Protocol-Owned Liquidity (POL) management

Detailed Specification: BondingCurve.md

Core Functions:

sequenceDiagram
    participant User
    participant BondingContract
    participant VotingEscrow
    participant TaikodromeLP
    participant Admin

    User->>BondingContract: bond(taikoAmount)
    BondingContract->>BondingContract: calculateTdAmount()
    User->>BondingContract: Transfer TAIKO
    BondingContract->>VotingEscrow: createLockFor(user, tdAmount, maxDuration)
    VotingEscrow->>User: Mint veTD NFT
    
    Admin->>BondingContract: deployPol(taikoAmount, tdAmount)
    Note over BondingContract: Auth: onlyAdmin
    BondingContract->>TaikodromeLP: addLiquidity(TAIKO, TD)
    TaikodromeLP->>BondingContract: LP tokens

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2. TWAP Oracle Integration

The bonding contract requires a manipulation-resistant price feed for the TAIKO/TD pair after the bootstrap phase.

Implementation Strategy: TWAP-Liquidity-Bootstrap-Strategy.md

Key Considerations:

• Minimum 30-minute TWAP window
• Sufficient liquidity depth before enabling
• Flash loan attack resistance

3. Aerodrome Fork Modifications

ERC20Votes Delegation for TAIKO

Since $TAIKO implements ERC20Votes, pools containing TAIKO must delegate voting power to prevent "dead" governance tokens.

Implementation Options:

1. Factory-level: Modify PoolFactory to auto-delegate on pool creation
2. Pool initialization: Add delegation logic to Pool.initialize()
3. Public function: Add delegateTaiko() callable post-deployment

// Recommended approach in Pool.sol
function delegateTaiko() external {
    address TAIKO = 0x...; // TAIKO address
    address SECURITY_COUNCIL = 0x...; // Delegation target
    
    require(token0 == TAIKO || token1 == TAIKO, "No TAIKO");
    IERC20Votes(TAIKO).delegate(SECURITY_COUNCIL);
}

4. veTD Maxi Relayer (TBD)

The Maxi Relayer automates two critical functions for veTD holders:

Auto-compound TD:

• Claims all rewards (fees, bribes, incentives)
• Converts to TD
• Compounds into existing veTD positions

Auto-vote:

• Implements optimal voting strategies
• Maximizes gauge rewards for participants
• Reduces coordination costs

Note: Detailed spec TBD

5. Dual Minter System

Taikodrome requires significant modifications to support both bonding and emissions:

Challenges:

• Two sources of TD minting (Bonding + Minter contracts)
• Exogenous TAIKO supply affects emission calculations
• Rebase mechanism complexity with external token

Required Investigations:

1. Emission Schedule: Optimal inflation given exogenous TAIKO supply
2. Rebase Calculations: Adjusting growth formula for pre-existing supply
3. Minting Coordination: Ensuring bonding and emissions don't conflict

Tokenomics Analysis: AERO-TOKENOMICS.md

Security Considerations

Delegation Architecture

All TAIKO in Taikodrome pools delegates to the Security Council for chain governance participation:

TAIKO in Pools → delegates to → Security Council

This prevents governance attacks through DEX liquidity while maintaining decentralization.

Open Questions

1. Optimal Tail Emission Rate: Given TAIKO's external utility, what inflation rate maintains competitive LP incentives?

2. Rebase Formula Adjustments: How to modify calculateGrowth() for non-zero starting supply?

3. Bonding Duration: Should bonding remain available indefinitely or have phases?

4. Relayer Economics: Fee structure and incentive alignment for Maxi Relayer operators

References

• Aerodrome Documentation
• Taiko ERC20Votes Implementation
• Original Aerodrome Contracts