š¹How cAssets Work
(Mechanics & Lifecycle)
While the philosophy of cAssets explains why they exist, their true power is in how they function. The lifecycle of a mapped asset is designed to be as simple and transparent as possible, but also robust enough to operate across multiple chains without introducing additional trust assumptions.
At a high level, every cAsset follows four basic stages:
1. Lock Native Asset
The process begins when a user deposits or stakes a native token ā such as DFI or USDC ā into a decentralised vault. This vault exists as a smart contract on the assetās home chain, and its rules are immutable: once an asset is locked, it cannot be moved or withdrawn except under the precise conditions defined in the contract. This ensures that all cAssets are always fully collateralised by verifiable, on-chain deposits.
2. Mint cAsset
In response to the lock event, the protocol mints the corresponding cAsset. For example, locking DFI results in the minting of cDFI; locking USDC results in the minting of cUSDC. This minting can happen on the Interchain Mesh and follows strict 1:1 mapping rules. There is never more cAsset in circulation than the amount of the underlying asset deposited.
3. Use Across Interchain
Once minted, cAssets are free to circulate across the Crypto Factor ecosystem. They can be transferred between chains, paired in liquidity pools, staked to earn rewards, or used as governance tokens. Because they are protocol-native instruments, they plug directly into the Interchain Mesh: an infrastructure layer that enables cAssets to function consistently across multiple blockchains without relying on custodial bridges.
This stage is where the true value of cAssets emerges. Users can engage in activities such as:
Liquidity Provision: Supplying cAssets to pools to support trading depth.
Governance: Using mapped governance tokens (like cDFI) to vote on-chain.
Yield Farming: Staking cAssets to earn APRs that often exceed base chain yields.
Cross-Chain Transfers: Moving mapped assets seamlessly between DeFiChain, Partisia, Polygon, and beyond.
4. Redeem Native Asset
At any point, a user can return their cAsset to the vault contract and burn it, unlocking the equivalent amount of the native asset. This mint-and-burn cycle guarantees reversibility: cAssets can always be redeemed 1:1 for their underlying collateral, anchoring their value in a way that wrapped or synthetic tokens cannot.
Incentives and Stability
The lifecycle of cAssets is reinforced by two natural mechanics:
Yield Effects: Many cAssets represent staked assets. Because rewards flow to the vault, they are reflected in the mapped supply. If not all holders restake, those who do enjoy proportionally higher yields, creating attractive APRs and incentivising continued participation.
Arbitrage Stability: If a cAsset trades below parity in a pool, arbitrageurs can buy it cheaply, redeem it for the underlying, and book the difference. This self-correcting mechanism ensures that cAssets maintain stable pricing without requiring synthetic pegs, oracles, or algorithmic rebasing.
Lifecycle Summary
The design can be summarised in a simple flow:
Lock Native Asset ā Mint cAsset ā Use Across Interchain ā Redeem Native Asset.
This straightforward but powerful cycle ensures that every cAsset is fully backed, portable, and stable - without introducing custodians, middlemen, or fragile simulations.
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