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A Scalable, Fair, & Decentralized Exchange Mechanism

Published onOct 05, 2019
A Scalable, Fair, & Decentralized Exchange Mechanism

Benjamin Smith is with Gnosis


Decent exchange: mutli-token batch auctions; gamified order maching

Eth as transaction register: minimal on chain storage; data availability, finalization

Dfusion PoC: a stable-coin exchange


Think of Batch auctions as an optimization problem: orders collected between a token pair over a batch time; computation of uniform clearing prices to maximize trader’s utility, subject to: limit orders, price coherence, arbitrage freeness, and preserved value. + Settlement.

Higher dimensions: three-token trading rings.

On-chain scaling via snapp: account balances are represented by root hashes; transactions are collected on chain as payload, hashed tl H(t). Anyone can process by proposing state transitions, along w a snark proof, leads to scaling in this case.


Batching details: transition types - deposit, withdraw, auction settlement.
Requests: made to a contract, call-data emitted as an event (broadcast as logs); Processing: processed in batches, uploaded.

Proof of Concept

Current proof of concept: a stablecoin exchange: entirely on-chain (not scaled), converting stable coins w/ slippage under .1% . Uniswap-like on-boarding.

Samuel Klein:

—> auctions