> For the complete documentation index, see [llms.txt](https://docs.elara.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.elara.fi/architecture/system-design.md).

# System Design

Elara splits responsibilities across three separate layers. No single component controls capital allocation, execution, and reporting at the same time. That separation is intentional.

## Elara Engine

The decision layer. It takes in deposited stablecoins, decides where capital goes, enforces risk limits, and manages the redemption buffer. Returns from execution partners flow back through the Engine and into the sELUSD price via a daily yield update.

## Price Oracle

Elara uses Chainlink price feeds to validate stablecoin prices at the point of mint and redeem. If an accepted stablecoin depegs, the oracle catches it and prevents arbitrageurs from exploiting the 1:1 exchange rate at the system's expense.

## Utila 

Wallet and MPC infrastructure, and the transaction-approval policy layer used by Arken and the protocol. Reserve assets are held within the Utila vault infrastructure rather than inside the Vault contract, and are not transferred into a separately controlled trading environment. Arken can manage funds within that infrastructure subject to the applicable multisig and transaction policies. Utila is also the control layer through which those permissions and policies are administered, and information flows back from it to the protocol for NAV calculation and disbursements. 

Utila is infrastructure. It is not a regulated custodian.

## Arken (Execution Partner)

Arken runs the strategies, concentrated liquidity market making on stablecoin pairs, with no directional exposure. ArkenYield is a private corporation currently executing a public listing process through a transaction involving City View Green Holdings Inc. (CSE: CVGR), which holds a minority equity position. Should that process complete, it would bring a level of disclosure obligation uncommon for a DeFi execution layer.

The system is built to support more execution partners down the line. Arken is first, but the modular design lets the Engine plug in additional providers as things scale.

| Component        | Role                                                                                                         |
| ---------------- | ------------------------------------------------------------------------------------------------------------ |
| **Elara Engine** | Capital allocation, risk enforcement, liquidity buffer                                                       |
| **Price Oracle** | Chainlink price feeds, with an optional secondary cross-check for stablecoin price validation on mint/redeem |
| **Utila (UTLA)** | Routing, settlement, reporting                                                                               |
| **Arken**        | Strategy execution (stablecoin CLMM)                                                                         |

For full contract architecture, inheritance maps, data flows, and developer documentation, see the [Contract Architecture](/architecture/contract-architecture.md) section.