Street Credit

Overview: Activating the Welsh Economic Flywheel

CREDIT is the liquidity provider (LP) token of Welsh Street Exchange - a tradable SIP-010 fungible token that represents proportional ownership in the WELSH/STREET liquidity pool. As the key component in solving WELSH’s economic isolation problem, CREDIT enables the secondary markets and speculation opportunities that create the continuous economic activity missing from traditional community coins.

Unlike many Stacks DEXs that use internal accounting or NFT positions, Welsh Street issues transferable LP tokens specifically designed to activate Phase 3 of the Welsh Economic Flywheel - where CREDIT secondary markets drive sustained economic growth for the entire WELSH ecosystem.

Innovative LP Token Design

Welsh Street introduces a Uniswap V2/SushiSwap-style LP token model to Stacks - the first of its kind in the ecosystem. This design choice creates significant advantages over existing Stacks exchanges:

Key Innovation: Tradable, composable LP tokens vs. internal balance tracking used by other Stacks DEXs.

SIP-010 Compliance & Transferability

CREDIT tokens are fully SIP-010 compliant, making them:

Transferable between any Stacks addresses
Tradable on secondary markets
Composable with other DeFi protocols
Stakeable in future governance systems
Collateralizable in lending protocols


;; CREDIT implements standard SIP-010 interface
(impl-trait 'SP3FBR2AGK5H9QBDH3EEN6DF8EK8JY7RX8QJ5SVTE.sip-010-trait-ft-standard.sip-010-trait)
 
;; Standard transfer function - fully transferable
(define-public (transfer
    (amount uint)
    (sender principal)
    (recipient principal)
    (memo (optional (buff 34)))
  )
  ;; Standard SIP-010 transfer implementation

Bulletproof Security Architecture

The CREDIT contract implements contract-caller authorization to prevent deployer manipulation while maintaining AMM functionality:


;; MINT FUNCTION - EXCHANGE CONTRACT ONLY
(define-public (mint (amount uint))
    (begin
      (asserts! (> amount u0) ERR_ZERO_AMOUNT)
      (asserts! (is-eq contract-caller .exchange) ERR_NOT_CONTRACT_OWNER) ;; 🔒 CRITICAL SECURITY
      (try! (ft-mint? credit amount tx-sender))
      (ok {minted: amount})
    )
)
 
;; BURN FUNCTION - EXCHANGE CONTRACT ONLY
(define-public (burn (amount uint))
    (begin
      (asserts! (> amount u0) ERR_ZERO_AMOUNT)
      (asserts! (is-eq contract-caller .exchange) ERR_NOT_CONTRACT_OWNER) ;; 🔒 CRITICAL SECURITY
      (try! (ft-burn? credit amount tx-sender))
      (ok {burned: amount})
    )
)

Security Features:

✅ Contract-Caller Authorization: Only .exchange contract can mint/burn CREDIT
✅ Deployer Protection: Admin cannot directly manipulate CREDIT supply
✅ Immutable Logic: No functions can be added/modified post-deployment
✅ Legitimate Operations Only: Supply changes only through proper LP provision/removal

Welsh Street vs. Other Stacks DEXs

Welsh Street Model: Tradable SIP-010 LP Tokens


WELSH + STREET → [Pool Contract] → Issues CREDIT Token (SIP-010)
                                        ↓
                                 Tradable, Composable Asset

Features:

Secondary Markets: LP tokens can be traded independently
Speculation Layer: Users can speculate on LP token value
DeFi Composability: LP tokens work with other protocols
Transparent Ownership: Clear tokenized representation of liquidity shares

Other Stacks DEXs: Internal Accounting Models

Examples: Velar, Alex, BitFlow


Multiple Tokens → [Central Pool Contract]
                         ↓
                Internal Balances or NFT Positions (Non-tradable)

Limitations:

❌ No Secondary Markets: LP positions cannot be traded
❌ Limited Composability: Other protocols can’t integrate LP shares
❌ Withdrawal Only: Users must exit positions to realize value

LP Token Economics

Value Accrual Mechanisms

Trading Fee Accumulation: CREDIT holders earn from every swap through reserve growth
Emission Rewards: STREET token rewards distributed to CREDIT holders
Withdrawal Tax Benefits: Taxes from LP withdrawals permanently increase reserve backing
Burn Appreciation: burn-liquidity calls increase CREDIT value by reducing supply


// Each CREDIT token represents proportional ownership
user_share = (user_credit_balance / total_credit_supply) * pool_reserves

When users redeem CREDIT tokens, they receive their proportional share of both WELSH and STREET reserves plus any accumulated fees.

Strategic Advantages

1. Capital Efficiency

LP tokens can be used as collateral while still earning fees
Secondary markets provide liquidity without withdrawing from pools
Composability with lending/borrowing protocols

2. Market Making Innovation

Professional market makers can accumulate LP tokens
Institutional investors can hold LP positions long-term
Arbitrageurs can trade LP tokens based on pool performance

3. Future Governance Integration

CREDIT holders could vote on protocol parameters
Staking mechanisms for additional rewards
DAO treasury could hold LP tokens for protocol-owned liquidity

Technical Specifications

Token Standard: SIP-010 Fungible Token Symbol: CREDIT Decimals: 6 (micro-precision matching underlying assets) Supply: Dynamic (minted/burned with liquidity operations) Transferability: Fully transferable between any principals Integration: Compatible with all SIP-010 supporting protocols

Ecosystem Impact

Welsh Street’s tradable LP token model transforms liquidity provision from a binary (in/out) decision to a continuous spectrum of strategies:

Hold for Yield: Traditional LP strategy earning fees + emissions
Trade LP Tokens: Speculate on pool performance without withdrawing
Use as Collateral: Borrow against LP positions while earning
Market Making: Professional strategies with LP token inventory
Protocol Integration: LP tokens as governance or staking assets

Security Analysis Summary

✅ Robust Protection Against Manipulation

The CREDIT contract’s security model ensures:

Proper Authorization: Only exchange contract can mint/burn tokens
Contract Immutability: No malicious functions can be added post-deployment
Limited Admin Privileges: Deployer cannot bypass authorization checks
Legitimate Operations Only: Supply changes only through proper AMM functions

This design prevents arbitrary manipulation while maintaining full AMM functionality and enabling the innovative tradable LP token model that solves WELSH’s economic isolation by creating secondary markets and expanding utility beyond simple holding - exactly what the Welsh economy needed to achieve sustainable growth.