Key Concepts

Understanding these core concepts will help you navigate RedCarpetHQ effectively.

Campaign Concepts

Campaign Token

Each campaign issues its own ERC20 token. When investors fund your project, they receive tokens representing their economic stake. These tokens can be:
  • Traded on the marketplace
  • Used as collateral for borrowing
  • Held to receive dividends
  • Burned for special redemption events

    • Floor & Ceiling

  • Floor: Minimum funding target. Campaign must reach this to succeed.
  • Ceiling: Maximum funding target (optional). Campaign stops accepting funds at this level.

    • Overage Types

    How your campaign handles funds above the floor:

    1. No Overage: Campaign ends exactly at floor
    2. Unlimited Overage: Accept funds indefinitely until deadline
    3. Ceiling Overage: Accept funds up to ceiling amount

    Campaign Status

  • Pending: Created but not yet started
  • Active: Currently accepting funds
  • Success: Reached floor target, funds claimable
  • Failed: Deadline passed without reaching floor
  • Cancelled: Manually cancelled by creator or screener

    • Grace Period

    After a campaign deadline passes without reaching the floor, there's a 24-hour grace period where the campaign can be extended or finalized as failed.

    Creator Finalize Grace Period

    After a successful campaign, creators have 2 weeks to decide whether to claim funds or cancel. After this period, anyone can finalize the campaign.

    Token Concepts

    Token Supply

  • Initial Supply: Determined by total funds raised and price per token
  • Supply Lock: After campaign succeeds, supply is locked (no new minting)
  • Burn Mechanism: Tokens can be burned for redemption events

    • Price Per Token

    Set during campaign creation. Example:
  • Price: 1 USDC per token
  • Investor contributes: 100 USDC
  • Tokens received: 100 tokens

    • Token Graduation

    When a campaign succeeds and is finalized, the token "graduates" to full platform features:
  • Trading enabled on marketplace
  • Lending/borrowing activated
  • Trading contests begin
  • Dividend distribution available

    • DeFi Concepts

    UnifiedVault (ERC4626)

    Each graduated token has its own lending vault where users can:
  • Deposit USDC: Earn interest from borrowers
  • Withdraw USDC: Redeem shares for underlying assets
  • Borrow USDC: Use campaign tokens as collateral
  • Repay Loans: Pay back borrowed amounts plus interest

    • Deposit Allocation (80/20 Split)

    When you deposit USDC into a vault:
  • 80% → Lending Pool: Available for borrowing
  • 20% → Stability Pool: Used for auto-liquidations

    • Risk Tiers

    The platform assesses each token's risk level:

    | Tier | Description | Collateral Factor | Liquidation Threshold |
    |------|-------------|-------------------|----------------------|
    | GREEN | Healthy market | 50% | 60% |
    | YELLOW | Moderate risk | 40% | 50% |
    | RED | High risk | 30% | 40% |

    Risk tier affects:

  • Interest rate splits

  • Borrowing limits

  • Supply caps

    • Collateral Factor

    Maximum you can borrow against collateral. Example:
  • Collateral Factor: 50%
  • Deposit: 100 tokens worth $1,000
  • Max Borrow: $500 USDC

    • Liquidation Threshold

    When your collateral value drops below this threshold, your position can be liquidated. Example:
  • Liquidation Threshold: 60%
  • Borrowed: $500 USDC
  • Liquidation occurs when collateral value < $833

    • Utilization Rate

    Percentage of lending pool currently borrowed: `` Utilization = Total Borrows / Lending Pool ` Higher utilization = higher interest rates

    Interest Rate Model

    Dynamic interest rates based on utilization:
  • Low Utilization (0-70%): Gradual rate increase
  • Optimal Utilization (70%): Target rate
  • High Utilization (70-85%): Steep rate increase
  • Max Utilization (85%): Hard cap, no more borrowing

    • Trading Concepts

    Offer Types

  • Buy Offer: Offer to buy tokens with USDC
  • Sell Offer: Offer to sell tokens for USDC

    • Escrow System

    All offers lock funds in the Market contract:
  • Buy Offers: USDC escrowed
  • Sell Offers: Tokens escrowed

    • Trade Fee

    Platform charges a fee on trades (default 2.5%):
  • Deducted from the trade amount
  • Distributed via FeeDistributor

    • VWAP Oracle

    Volume-Weighted Average Price oracle provides fair market prices:
  • Updates on every trade
  • Resistant to manipulation
  • Used for liquidation pricing

    • Trading Contest

    6-hour competition epochs:
  • Track buy-side USDC volume
  • Minimum 15,000 USDC to qualify
  • Pro-rata rewards from trading fees
  • First claimer gets 1% bounty

    • Fee Distribution

    All platform fees are distributed via the FeeDistributor:

    | Recipient | Share | Purpose |
    |-----------|-------|---------|
    | Protocol Treasury | 40% | Platform development |
    | Trading Contest | 40% | Trader rewards |
    | UnifiedVault | 10% | Protocol's vault allocation |
    | Producer | 10% | Token creator rewards |

    Dividend Concepts

    Dividend Round

    A distribution event where producers share revenue: 1. Create round with USDC amount 2. Take snapshot of token holders 3. Activate round for claims 4. Token holders claim proportionally

    Snapshot

    Blockchain snapshot capturing:
  • All token holder addresses
  • Token balances at specific block
  • Total supply at that moment

    • Pro-Rata Distribution

    Each holder receives dividends proportional to their holdings:     ` User Dividend = (User Balance / Total Supply) × Total Dividend Amount ``

    Security Concepts

    Screening

    Quality control mechanism:
  • Screeners: Authorized addresses that approve producers
  • Whitelist: Only approved producers can create campaigns
  • Toggle: Can be disabled for open access

    • Circuit Breaker

    Emergency pause mechanism triggered by:
  • Excessive bad debt (>10,000 USDC)
  • Extreme utilization (>99%)
  • Severe price staleness (>12 hours)

    • Reentrancy Protection

    All state-changing functions protected against reentrancy attacks.

    Pausable Contracts

    Critical contracts can be paused in emergencies by authorized addresses.

    Time Concepts

    Campaign Duration

  • Maximum: 270 days (9 months) from initial start
  • Extensions: Can extend once (default)
  • Grace Period: 24 hours after deadline

    • Contest Epochs

  • Duration: 6 hours
  • Start: When token graduates
  • Continuous: Runs indefinitely

    • Activation Delay

    Some features have delays before activation:
  • Vault activation: Can be scheduled for future time
  • Prevents immediate exploitation after campaign

    • Network Concepts

    Network

    EVM-compatible Layer 2 where RedCarpetHQ operates:
  • Block Time: ~2 seconds (Layer 2)
  • Gas Token: ETH
  • Explorer: Available on the platform dashboard

    • USDC (6 Decimals)

    Payment token for all transactions:
  • 1 USDC = 1,000,000 (6 decimals)
  • Acquire through your preferred exchange or on-ramp

    • Gas Fees

    Transaction costs paid in ETH:
  • Campaign creation: ~500k gas
  • Token purchase: ~150k gas
  • Trading: ~200k gas
  • Vault operations: ~150-300k gas

    • Glossary

  • APY: Annual Percentage Yield - yearly return rate
  • Borrow Index: Accumulator tracking interest accrual
  • ERC20: Standard token interface
  • ERC4626: Standard vault interface
  • Liquidity: Available funds for trading/borrowing
  • Slippage: Price difference between expected and executed
  • TVL: Total Value Locked - total funds in protocol
  • Utilization: Percentage of funds currently borrowed
  • VWAP: Volume-Weighted Average Price

    • Next Steps: Set Up Your Wallet →