# Technical Overview

## Overview

This section covers the technical mechanics of the SHIFT protocol: minting, redemption, oracle architecture, and contract design.

#### Core components

* **SHIFT Solana program:** the on-chain program that mints, burns, and tracks Series Token supply
* **Series Token contracts:** individual SPL token contracts, one per Series, each tracking a specific underlying ETF
* **Backing layer:** the regulated entity that holds the underlying leveraged ETFs 1:1 against every token in circulation
* **Chainlink Proof-of-Reserves:** the oracle layer that verifies 1:1 backing on-chain and gates mint operations
* **Brokerage rails:** the API connections to regulated brokerage partners that execute the underlying ETF purchases and sales
* **Market-maker layer:** professional market makers who stream RFQ quotes to Solana venues and replenish inventory through the protocol's mint and burn endpoints
* **DeFi integrations:** Jupiter, Meteora, Kamino, Orca user-facing liquidity and composability layer

#### Trust assumptions

* **Backing layer:** users trust SHIFT and its brokerage partners to maintain segregated, accurate custody of the underlying ETFs
* **Oracle layer:** users trust Chainlink Proof-of-Reserves to publish accurate reserve data
* **ETF issuer layer:** users trust the leveraged ETF issuer (e.g. Direxion) to maintain the daily-reset leverage as designed
* **Smart contract layer:** users trust the audited SHIFT Solana program to mint and burn Series Tokens correctly
* **Market-maker layer:** users trust professional market makers to stream fair quotes within their KPI-bound spread schedule

Each layer is verifiable independently. The brokerage layer is regulated. The oracle layer publishes on-chain. The ETF issuer is a public, regulated fund manager. The smart contracts are audited and open-source.

## Minting

Minting is the process of issuing new SHIFT Series Tokens backed by verified assets. Mint operations are constrained by Proof-of-Reserves feed and gated to authorized participants.

{% hint style="info" %}
End users do not interact with the mint endpoint directly. Mint and burn are B2B endpoints used by professional market makers to maintain inventory. Users acquire Series Tokens by swapping on Jupiter against market-maker liquidity.
{% endhint %}

### Mint flow

{% stepper %}
{% step %}

### A market maker submits a mint request

A market maker submits a mint request through the protocol's authorized endpoint, paying USDC.
{% endstep %}

{% step %}

### SHIFT executes the ETF purchase

SHIFT executes the corresponding ETF purchase through its brokerage rails.
{% endstep %}

{% step %}

### ETF is delivered into custody

The ETF is delivered into segregated custody.
{% endstep %}

{% step %}

### Proof-of-Reserves registers backing

Proof-of-Reserves registers the new backing position.
{% endstep %}

{% step %}

### Series Tokens are minted

The SHIFT Solana program mints the corresponding SPL Series Tokens to the market maker's inventory wallet.
{% endstep %}

{% step %}

### Inventory is used to fill trades

The market maker uses this inventory to fill subsequent user trades on Jupiter and other venues.
{% endstep %}
{% endstepper %}

### Mint hours

Backing operations (ETF purchases) run 24/5, in line with U.S. trading hours. User-facing trading on Jupiter remains 24/7.

### Fees

User-facing trading costs are reflected in the RFQ spread quoted by market makers. Spreads are tighter during U.S. market hours and wider on weekends.

## Burning

Burning is the process of retiring SHIFT Series Tokens against the underlying backing. Burn operations are gated to authorized participants typically market makers reducing inventory after net user sells.

{% hint style="info" %}
End users do not interact with the burn endpoint directly. To exit a position, users sell their Series Tokens on Jupiter against market-maker liquidity. The market maker then burns excess inventory through the B2B endpoint as needed.
{% endhint %}

### Burn flow

{% stepper %}
{% step %}

### A market maker submits a burn request

A market maker submits a burn request through the protocol's authorized endpoint, returning Series Tokens.
{% endstep %}

{% step %}

### Series Tokens are burned

The Series Tokens are burned on-chain by the SHIFT Solana program.
{% endstep %}

{% step %}

### SHIFT sells the ETF position

SHIFT sells the corresponding ETF position through its brokerage rails.
{% endstep %}

{% step %}

### USDC is delivered

USDC equal to the ETF sale value is delivered to the market maker.
{% endstep %}

{% step %}

### PoR updates

The Proof-of-Reserves feed updates to reflect the reduced reserve position.
{% endstep %}
{% endstepper %}

### Burn hours

Backing operations (ETF sales) run 24/5, in line with U.S. trading hours. User-facing sales on Jupiter remain 24/7.\ <br>


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