System Architecture

Highway is built around an architecture designed to combine safety, capital efficiency, and automated execution.

The system separates user intent, asset execution, and portfolio management, ensuring users interact with a simple interface while the protocol handles the complex operations behind the scenes.

The architecture consists of four core components:

• Client Deposit Account

• Highway Contract (on-chain core)

• Off-chain Worker

• Smart Vault

Together, these components create a fully automated, non-custodial, ETF-like asset system.

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Deposit Flow Overview

When a user deposits funds, Highway follows a structured, multi-stage process designed to maximize safety and eliminate execution risk.

Step 1 - User Deposit

The user deposits a supported asset (e.g., USDC) into a Client Deposit Account.

This temporary staging account acts as a secure buffer:

• it isolates user funds

• prevents partial execution failures

• protects from slippage

• ensures the entire strategy executes atomically

This model will later evolve into batched deposits, reducing costs and improving system throughput.

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Step 2 - Strategy Preparation (Off-chain Worker)

The Worker is an off-chain process responsible for reading the Smart Vault configuration and preparing the complete execution plan.

The Worker:

• reads target allocations

• reads eligible strategies (stake, swap, mint, lend, etc.)

• constructs the optimal entry sequence

• simulates transactions off-chain

• ensures transactions meet safety parameters (limits, slippage, thresholds)

Once the Worker prepares the plan, it submits it to the blockchain.

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Step 3 - On-chain Validation

The Highway Contract validates the Worker’s plan against the Smart Vault’s rules:

• allowed assets

• maximum slippage

• target weights

• position size

• protocol safety checks

• oracle-verified pricing

Only if all conditions match, the execution can proceed.

This ensures the Worker cannot execute arbitrary or unsafe transactions.

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Step 4 - Execution of Entry Strategies

Using integrations with external DeFi protocols (Jupiter, Kamino, Drift, etc.), the Worker:

• swaps deposited tokens

• stakes assets

• mints yield-bearing tokens

• deposits into lending or yield protocols

The required assets are returned back to the Highway Contract.

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Step 5 - Finalization and Minting

Once the Worker completes all steps:

• Acquired assets are transferred into the Smart Vault.

• Highway calculates the updated exposure and share value.

• The user receives a newly minted Highway Asset token, representing ownership of their proportional share in the Vault.

The user now holds a single liquid token representing a diversified portfolio.