1. Overview:

Mento V3 is an evolution of the Mento Protocol, transitioning from a Reserve-backed stablecoin issuance and swap protocol to a CDP-Backed Foreign Exchange (FX) protocol. V3 enables fixed-price stablecoin swaps through a market maker contract (FPMM), liquidity management through FPMM rebalancing strategies and user-driven issuance through CDPs (LiquityV2 fork).

Network: Celo Mainnet

Status: AUDIT READY

2. Mento V3 Components

2.1. Liquity V2

https://github.com/mento-protocol/bold/pull/17

ChainSecurity_Intermediate_report_Mento_Liquity_v2_draft.pdf

Mento V3 extends Liquity V2 to enable collateralized stablecoin minting with cUSD (soon-to-be-renamed into USD.m) as collateral. All non-USD stablecoins (cEUR, cJPY, cGBP, etc.) are issued through the CDP model. The following modifications were made to the Liquity V2 protocol:

2.2.1. SystemParams.sol

• Upgradable storage for all protocol parameters
• Protocol parameters can be adjusted through governance
• Vars are immutable type to reduce storage reads
• Initial parameter values can be seen here

2.2.2. BatchManagerOperations.sol

• Split up implementation of Borrower Operations to manage contract size limits
• Original Borrower Operations contract exceeded Solidity size limits after our changes
• It should maintain identical logic

2.2.3. LiquityBaseInit.sol

• Upgradable version of base contract for use in upgradable contracts