> For the complete documentation index, see [llms.txt](https://axon-finance.gitbook.io/axon-finance-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://axon-finance.gitbook.io/axon-finance-docs/technical-yellowpaper/yellowpaper.md). # Yellowpaper Introduction Protocol technical design specification > **This yellowpaper is the protocol technical design specification for AXON Finance.** The whitepaper answers "why" and "what"; this yellowpaper answers "**how to build it**." It takes the architectural concepts from whitepaper [Part III · Technical Architecture](/axon-finance-docs/part-iii-technical-architecture/part3-architecture.md) and [Part V · AI-Native](/axon-finance-docs/part-v-ai-native/part5-ai.md) and deepens them to the **protocol-specification level** — using formal notation, pseudocode, data structures, and state machines to lay out AXON L1's design layer by layer. ## On the Nature of This Document > **This document describes a proposed design (a design specification), not a system that is already implemented or deployed.** > > AXON is in the design and development stage. The protocol mechanisms, algorithms, and parameters given in this yellowpaper are **engineering design targets**: the specific choices within (consensus algorithm, signature scheme, state structure, etc.) represent current design decisions, and the final implementation may be adjusted in details; parameters labeled `Design Target` or `TBD` will be finalized after testnet benchmarking and mainnet launch. **Features not yet live are not claimed as implemented.** For readability, this document labels the degree of certainty of each section's content with a one-line `Design status` note, rather than repeating long disclaimers. The full basis-grading is consistent with the whitepaper. ## Design Goals AXON's protocol design centers on a single core proposition: **provide determinism for payments and settlement**. From it derive four hard constraints that run through the whole text: 1. **Deterministic finality** — a transaction is irreversible once confirmed, without relying on probabilistic accumulation. 2. **Verifiability and recoverability** — every state change can be independently replayed, audited, and recovered. 3. **Bounded authorization** — the payment authority of accounts and AI agents can be constrained precisely and revocably. 4. **Predictable cost and performance** — a payment-grade SLA: high throughput, sub-second finality, and low, predictable fees. ## Relationship to the Whitepaper | Whitepaper Section | Yellowpaper Deepening | | -------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | 3.2 Five-layer architecture | Developed layer by layer into a protocol specification throughout | | 3.3 Consensus & performance | [B.1](/axon-finance-docs/yellowpaper-b-consensus-and-ledger/b1-consensus.md) Consensus protocol · [G.2](/axon-finance-docs/yellowpaper-g-networking-and-performance/g2-performance.md) Performance model | | 3.4 Payment finality | [B.4](/axon-finance-docs/yellowpaper-b-consensus-and-ledger/b4-sequencing.md) Sequencing/Entry-Log · [B.5](/axon-finance-docs/yellowpaper-b-consensus-and-ledger/b5-finality.md) Finality | | 3.5 Price-feed safety | [D.2](/axon-finance-docs/yellowpaper-d-settlement-oracle-compliance/d2-oracle.md) Oracle & price feeds | | 3.6 Compliance gateway | [D.3](/axon-finance-docs/yellowpaper-d-settlement-oracle-compliance/d3-compliance.md) Pluggable compliance | | 3.7 Account abstraction / session keys | [C.1](/axon-finance-docs/yellowpaper-c-account-abstraction-and-ai-authorization/c1-account-abstraction.md)–[C.3](/axon-finance-docs/yellowpaper-c-account-abstraction-and-ai-authorization/c3-policy-paymaster.md) | | 4.2 / 4.4 PayFi money market | [E.1](/axon-finance-docs/yellowpaper-e-payfi-protocol-mechanisms/e1-money-market.md)–[E.2](/axon-finance-docs/yellowpaper-e-payfi-protocol-mechanisms/e2-liquidation.md) | | 4.5 US-equity copy-trading engine | [E.3](/axon-finance-docs/yellowpaper-e-payfi-protocol-mechanisms/e3-copy-trading.md) Engine protocol · [E.4](/axon-finance-docs/yellowpaper-e-payfi-protocol-mechanisms/e4-reserve-risk.md) Reserve & risk control | | 5.2 Controlled payment execution | [C.2](/axon-finance-docs/yellowpaper-c-account-abstraction-and-ai-authorization/c2-session-keys.md) Session-key authorization model | ## Chapter Map * **A · System Model & Cryptography** — network/fault model, security goals, cryptographic primitives. * **B · Consensus & Ledger** — BFT PoS consensus, validators, state model, sequencing layer, payment finality. * **C · Account Abstraction & AI Authorization** — native account abstraction, session-key authorization model, policy sandbox and Paymaster. * **D · Settlement · Price Feeds · Compliance** — stablecoin settlement engine, oracle safety, pluggable compliance gateway. * **E · PayFi Protocol Mechanisms** — on-chain money market, credit risk control and liquidation, the US-equity copy-trading engine (the first open ecosystem) and its reserve risk control. * **F · Protocol Economics & Security** — gas and fee market, staking and slashing, security and threat model. * **G · Networking & Performance** — P2P networking layer, performance model and derivation of design targets. * **Appendix** — notation table, protocol parameter table, core data-structure definitions. ## Reading Conventions * Formal notation is defined uniformly in [Appendix I · Notation](/axon-finance-docs/yellowpaper-appendices/appendix-notation.md). * All protocol parameters are consolidated in [Appendix II · Protocol Parameters](/axon-finance-docs/yellowpaper-appendices/appendix-parameters.md), labeled with the three states `proposed / Design Target / TBD`. * Core data structures are defined in [Appendix III](/axon-finance-docs/yellowpaper-appendices/appendix-datastructures.md). * Pseudocode is **illustrative** — used to express algorithmic intent, not final APIs or implementations. *** *Next:* [*A.1 System Model, Assumptions & Security Goals*](/axon-finance-docs/yellowpaper-a-system-model-and-cryptography/a1-system-model.md) --- # Agent Instructions This documentation is published with GitBook. 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