4. Technical Architecture

KTON is engineered around a modular, upgradable smart-contract system dubbed LST V2. The design separates critical functions into isolated contracts, enabling safer upgrades and clearer auditability.

4.1 Core Participants

Role	Description
Nominators	Deposit TON, receive $KTON, earn rewards.
Node Operators	Run validator nodes on behalf of the pool.
Governance DAO	Adjusts parameters, elects operators, manages treasury.

4.2 Contract Breakdown

Contract	Key Responsibilities
Pool Root	User entry-point: handles deposits, redemptions, exchange-rate updates.
Controller	Stakes funds with the TON Elector, coordinates validator rotation & MEV optimisation.
Jetton Minter	Issues & burns $KTON, tracks total supply.
Governance Root	Stores DAO parameters, quorum rules and on-chain proposals.
Treasury	Collects protocol fees, executes budget proposals.
SudoerExecutor	One-time upgrade agent with 48-hour time lock.
Emergency Halter	Can pause specific functions if anomalies detected.

4.2.1 Pool Root

• Maintains the exchange rate (ton_per_kton).

• Emits Deposit / Redeem events for indexers.

• Calls controller::stake() when available balance crosses threshold.

4.2.2 Controller

• Generates validator wallet keys deterministically.

• Submits ton_elector::add_stake and recover_stake messages.

• Implements MEV strategy by dynamically adjusting validator weight.

• Supports multi-controller configuration for geo-redundancy.

4.2.3 Governance Root

• Accepts proposals signed by $KTON holders.

• Uses quadratic voting (planned upgrade) to balance whales and retail.

• Enforces time-lock of 24-48 h before executing approved upgrades.

4.3 Data Flow

KTON uses a structured flow of funds and data between the user wallets and various system components:

1. Users deposit TON coins into the Pool Root contract

2. Pool Root mints KTON tokens via the Jetton Minter

3. TON coins are staked through the Controller contract

4. The Controller interacts with TON Elector for validator operations

5. Rewards flow from TON Elector back to the Controller

6. The Controller updates exchange rates in the Pool Root

7. When redeeming, Pool Root burns KTON tokens via Jetton Minter

8. Finally, TON coins are returned to users

4.4 Security Layers

1. Static Analysis & Formal Verification — Scripts ensure invariant properties before deployment.

2. Role-Based Access Control — Separate keys for halter, sudoer, approver & treasury.

3. Circuit Breakers — Halter can freeze deposits, redemptions or full contract.

4. Time-Delayed Upgrades — SudoerExecutor enforces a public notice period.

5. On-chain Monitoring — Metrics exported to Prometheus & Grafana dashboards.

Continue to 5. Smart Contract Design for contract-level details.