Transmuters are a novel on-chain mechanism designed to facilitate asset conversion and generate value within decentralized ecosystems. They enable seamless and trustless conversion of one digital asset into another, leveraging smart contracts to ensure transparency, security, and efficiency.

How it works

On one side, users deposit assets, which can include protocol tokens, LP tokens, or any other ERC20 tokens. A portion of these deposits is harvested over time at a predefined rate, with the harvested assets either being collected by a DAO, directed to a contract, or burned.

In exchange, depositors can claim rewards, which are provided by a DAO, collected as fees from an existing contract, or sourced from another entity, all at a defined rate.

Key Features

1. Decentralized Asset Conversion

Transmuters operate on blockchain networks, allowing for decentralized conversion of assets without the need for intermediaries. This ensures a trustless environment where users maintain full control over their assets.

2. Smart Contract Integration

Transmuters utilize smart contracts to automate the conversion process. These contracts define the rules and conditions for conversion, ensuring that transactions are executed only when all criteria are met.

3. Slow Conversion Mechanism

Transmuters convert assets gradually over time. This approach aims to achieve a better conversion rate compared to the spot exchange rate by leveraging the yield generated during the conversion process.

4. Yield Generation

Assets deposited in transmuters generate yield using existing DeFi strategies to improve the conversion rate. This mechanism allows users to swap an asset for another at a higher price than other types of exchanges.

Conversion Mechanism

The conversion mechanism involves the following steps:

  1. User Initiation: A user initiates a conversion by sending a specified amount of the input asset to the conversion contract.

  2. Rate Determination: The contract determines the conversion rate based on predefined rules or market conditions.

  3. Gradual Conversion: The input asset is gradually converted into the output asset over time, leveraging the yield generated during this period.

  4. Asset Distribution: During the conversion, the input asset can be burnt, collected by a DAO, sent to another contract, or redirected to another transmuter.

  5. Liquidity Update: The liquidity pool contract updates the available assets to reflect the ongoing conversion.

Use Cases

1. Acquire tokens at a discount

Users can leverage the yield generated by assets within transmuters to acquire tokens at a discounted rate, benefiting from favorable market conditions and rates to swap tokens at reduced prices.

2. Liquidity Farming

DAOs can enhance liquidity incentives by rewarding liquidity providers who deposit their LP tokens into transmuters, in exchange for various types of assets.

3. Protocol-Owned Liquidity

By setting a higher harvest rate, a DAO can collect or lock away a portion of the LPs deposited in transmuters, thereby strengthening the liquidity available on decentralized exchanges (DEXes).

4. Community-Owned Liquidity

Conversely, DAOs can distribute and decentralize their liquidity in exchange for any type of asset, ensuring sufficient liquidity on DEXes while growing their treasuries.

5. Fee sharing

Protocol-generated fees can be collected in a transmuter and used to reward depositors, aligning incentives and distributing value back to the community.

6. Token Burn

Assets collected in a transmuter can be used to buy back and burn the protocol's tokens over time in a fully trustless and decentralized manner, reducing supply and potentially increasing token value.

7. Asset Management

Transmuters can be used to manage and optimize asset portfolios by gradually converting assets to achieve better rates and yield outcomes.

8. Liquid Transmuting

Depositors receive TRT tokens representing their position, which can be used in other contracts, unlocking a wide range of new DeFi applications.


Transmuters represent a significant advancement in the field of blockchain and decentralized finance, offering a secure, transparent, and efficient method for asset conversion, yield generation, and buybacks. By leveraging smart contracts and decentralized principles, transmuters provide a versatile tool for asset management within the blockchain ecosystem.

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