4. Synthetic tokens handling

With control smoothly transitioning back to the Entangle Router contract, it directs the next phases in the protocol's process - the SynthFactory.

Acting as a factory for synthetic tokens, the SynthFactory holds all necessary data for generating and annihilating synthetic tokens.

It also dynamically adjusts the prices of these tokens, ensuring their value progressively grows through the tactical reinvestment of rewards.

The main challenge here is to:

  • Find a good path to reinvest rewards with good slippage.

  • Find optimal amounts to deposit while reinvesting rewards.

To solve the first problem, we introduced a compound system. This logic is represented in a separate smart contract - Compounder

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