Summary
PolkaYield Nexus is a proposed Polkadot-native protocol combining liquid staking, lending liquidity, and automated capital allocation through one transparent vault interface.
Users deposit DOT and receive yrDOT, a proposed non-rebasing receipt token representing their proportional share of the vault’s net assets.
This post is an early Pre-Proposal intended to collect community feedback before submitting a binding Polkadot OpenGov Treasury referendum.
Repository:
https://github.com/doki03164/PolkaYield-Nexus
Proposed Milestone 1 funding:
45,000 USDT
Proposed delivery period:
8 weeks
The Problem
DOT holders currently need to use several different products to access staking rewards, maintain liquidity, and participate in lending markets.
This creates several problems:
- Native staking may reduce immediate asset liquidity.
- Users must manage multiple interfaces and risk models.
- Fees and capital allocations may not always be transparent.
- Staking, lending, and liquidity risks are often presented separately.
- Users may find it difficult to verify where their assets are allocated.
PolkaYield Nexus proposes a unified and transparent interface for managing these activities.
Proposed Solution
Users deposit DOT into a share-based vault and receive yrDOT.
The protocol then allocates capital between:
- The PolkaYield Nexus protocol-owned Nomination Pool
- Protocol-operated validators
- An isolated lending-liquidity module
- An instant-redemption reserve
The router will not allocate funds to third-party Nomination Pools.
The protocol-owned Nomination Pool will charge a 0.5% pool commission under the current specification.
The protocol deposit fee is planned to be 0%. Network fees, XCM execution costs, and other unavoidable blockchain fees will remain visible to users.
Why Protocol-Owned Infrastructure?
The protocol-owned-only model is intended to provide clearer accountability and stronger operational control.
PolkaYield Nexus will publish:
- Nomination Pool address
- Validator identities
- Pool commission
- Validator status
- Infrastructure uptime
- Allocation records
- Relevant runtime configuration
- Incident and performance reports
Third-party Nomination Pools will not be included in the router.
Product Flow
- A user deposits DOT.
- The vault mints yrDOT shares.
- The user selects a risk and allocation profile.
- The router allocates funds according to on-chain limits.
- Staking and lending rewards increase the vault’s net assets.
- The yrDOT exchange rate reflects the user’s proportional share.
- Users can request redemption according to available liquidity and protocol rules.
Current Beta
A bilingual Chinese and English Beta is already available in the public repository.
The current Beta includes:
- DOT deposit and redemption simulations
- yrDOT share-accounting simulation
- Three allocation profiles
- Protocol-owned pool restrictions
- A 0.5% pool commission display
- Risk and infrastructure transparency pages
- Chinese and English language switching
- Automated unit tests
- Browser rendering verification
- A professional project proposal and funding guide
The Beta currently contains simulated data. It is not a production protocol and does not represent guaranteed returns.
Repository:
https://github.com/doki03164/PolkaYield-Nexus
Proposed Technical Architecture
The current deployment direction is an existing EVM-compatible Polkadot parachain.
The final environment will be selected after evaluating XCM support, developer tooling, and the feasibility of interacting with Polkadot-native staking functions.
The proposed architecture contains the following components:
Smart Contract Layer
Solidity contracts will implement:
- DOT vault accounting
- yrDOT share issuance
- Deposits and redemptions
- Allocation restrictions
- Role-based access control
- Timelock controls
- Emergency pause controls
Staking Integration Layer
An adapter will be developed to interact with Polkadot staking and Nomination Pool functionality through the selected parachain and XCM route.
Milestone 1 will include a mock staking adapter and a documented interface. Live XCM staking integration will be proposed only after technical feasibility has been demonstrated.
Routing Layer
The router will enforce allocation limits and approved destinations.
The protocol-owned Nomination Pool restriction must be enforced by the smart-contract system rather than relying only on the frontend.
Transparency Layer
The frontend will display:
- Vault exchange rate
- Asset allocation
- Pool commission
- Validator status
- Available redemption liquidity
- XCM transaction status
- Protocol incidents and warnings
Milestone 1 Funding Request
Requested amount:
45,000 USDT
Delivery period:
8 weeks
Milestone 1 will focus only on the vault and accounting foundation.
It will not request funding for a complete mainnet launch.
Milestone 1 Deliverables
- Solidity-based share vault.
- Non-rebasing yrDOT receipt token.
- Deposit and redemption accounting.
- Fee and rounding logic.
- Allocation-bound interfaces.
- Protocol-owned-pool-only enforcement.
- Mock staking adapter.
- Multisig-compatible administration.
- Timelock and emergency pause design.
- Unit, fuzz, and invariant tests.
- Public technical documentation.
- Reproducible deployment and testing commands.
- Public test deployment where supported.
- Final delivery report linked to commits and test results.
Acceptance Criteria
Milestone 1 will be considered complete when:
- The funded source code is publicly available.
- A tagged release identifies the delivered version.
- Tests pass from a clean repository checkout.
- Funded contracts target at least 90% statement and branch coverage.
- Any coverage exclusions are documented.
- Share-accounting invariants cover deposits, redemptions, rounding, donations, and changes in total assets.
- Unapproved third-party pool destinations are rejected.
- Administrative controls follow the published security model.
- Test deployment addresses and transaction links are published.
- Known limitations and deferred work are clearly documented.
Proposed Budget
Solidity engineering:
24,000 USDT
Testing and independent technical review:
9,000 USDT
Frontend integration:
5,000 USDT
Project management and documentation:
4,000 USDT
Test infrastructure and operations:
3,000 USDT
Total:
45,000 USDT
A detailed staffing plan, working-hour estimate, contributor information, and beneficiary address will be published before any binding Treasury referendum.
Risks and Mitigations
Smart Contract Risk
Mitigation:
- Limited Milestone 1 scope
- Unit and invariant testing
- Independent technical review
- External audit before mainnet deployment
XCM Integration Risk
Mitigation:
- Mock adapter during Milestone 1
- Separate XCM feasibility analysis
- Public documentation of destination calls and origin requirements
- Test deployment before production integration
Validator and Slashing Risk
Mitigation:
- Protocol-operated infrastructure
- Continuous monitoring
- Allocation limits
- Transparent validator records
- Clear user disclosures
Liquidity Risk
Mitigation:
- Dedicated redemption reserve
- Withdrawal limits where required
- Staged capacity limits
- Transparent liquidity status
Administrative-Key Risk
Mitigation:
- Multisig administration
- Timelock
- Restricted roles
- Public configuration changes
- Scoped emergency controls
Public Benefit to Polkadot
PolkaYield Nexus aims to:
- Increase the utility and composability of DOT
- Simplify access to staking and lending strategies
- Publish reusable vault and staking-adapter interfaces
- Produce public tests and XCM feasibility findings
- Improve transparency around staking infrastructure
- Demonstrate milestone-based Treasury funding
- Keep funded deliverables publicly auditable
Items Required Before a Formal Referendum
Before submitting a binding Treasury referendum, the project will add:
- Responsible contributor names and roles
- Relevant GitHub and professional profiles
- Verified Polkadot identity
- Asset Hub beneficiary address
- Beneficiary multisig policy
- Detailed working-hour and cost assumptions
- Protocol-owned test-pool deployment plan
- EVM parachain and XCM feasibility decision
- Independent review or audit quotations
- Maintenance and incident-response commitments
Community Questions
We would appreciate feedback on the following points:
- Is a narrowly scoped 45,000 USDT Milestone 1 preferable to a larger multi-stage request?
- Which EVM environment should be prioritized for the staking-adapter proof of concept?
- Are the proposed acceptance criteria sufficiently objective?
- What additional transparency should be required for the protocol-owned pool and validators?
- Should staking integration, lending integration, and the external audit be submitted as separate future proposals?
- Is the proposed 0.5% protocol-owned pool commission reasonable?
Next Steps
Following community feedback, we plan to:
- Keep this discussion open for review.
- Answer technical and budget questions.
- Publish the missing team and beneficiary information.
- Revise the scope and budget where appropriate.
- Publish the XCM feasibility decision.
- Submit a formal Treasury referendum only after the proposal is sufficiently complete.
Thank you for reviewing PolkaYield Nexus. We welcome technical, governance, budget, and risk-management feedback.