papers/zoo-impact-bonds/sections/05-smart-contract-architecture.tex

\section{Smart Contract Architecture}

\label{sec:contracts}
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\subsection{Contract Overview}

The BIB smart contract system consists of four core contracts:

\begin{enumerate}
  \item \textbf{BIBFactory}: Creates and parameterizes new BIB issuances.
  \item \textbf{BIBToken}: ERC-1155 multi-token representing bond
    positions.
  \item \textbf{BIBEscrow}: Manages capital flows, milestone triggers,
    and payment distribution.
  \item \textbf{BIBOracle}: Aggregates verification data and computes
    outcome scores.
\end{enumerate}

\subsection{Outcome Verification Interface}

\begin{lstlisting}[caption={Oracle verification interface.},
  label={lst:oracle}]
interface IBIBOracle {
    struct VerificationReport {
        uint256 bondId;
        uint256 period;
        uint256 metricValue;
        bytes32 evidenceHash;
        uint256 confidence;
        address verifier;
    }

    function submitReport(
        VerificationReport calldata report
    ) external returns (bool);

    function getOutcomeScore(
        uint256 bondId,
        uint256 period
    ) external view returns (
        uint256 score,
        uint256 confidence
    );

    function resolveDispute(
        uint256 bondId,
        uint256 period
    ) external;
}
\end{lstlisting}

\subsection{Payment Logic}

\begin{lstlisting}[caption={Milestone payment logic.},
  label={lst:payment}]
function processMilestone(
    uint256 bondId,
    uint256 period
) external {
    Bond storage bond = bonds[bondId];
    require(
        block.timestamp >= bond.milestones[period],
        "Milestone not reached"
    );

    (uint256 score, uint256 conf) =
        oracle.getOutcomeScore(bondId, period);
    require(conf >= MIN_CONFIDENCE, "Low confidence");

    uint256 payment;
    if (score >= bond.targetThreshold) {
        payment = bond.basePayment + bond.bonusPayment;
    } else if (score >= bond.minThreshold) {
        payment = bond.basePayment
            * score / bond.targetThreshold;
    }

    _distributePayment(bondId, payment);
}
\end{lstlisting}

\subsection{Risk Mitigation}

\begin{itemize}
  \item \textbf{Graduated release}: Capital released in tranches,
    contingent on interim milestones.
  \item \textbf{Insurance pool}: 5\% of issuance proceeds fund a shared
    pool covering partial investor losses on failed bonds.
  \item \textbf{Dispute resolution}: Two-tier mechanism using automated
    rechecks followed by DAO governance vote.
  \item \textbf{Force majeure}: Climate disasters or political
    instability triggers can pause milestone clocks.
\end{itemize}


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