Stellar Community Fund

By CLOB

CLOB (A Central Limit Order Book)

SCF #20

$14.8K

Legacy v5.0 Community Award

Awarded (10%)

Revolutionizing Stellar DEX: combines decentralized assets by Soroban ecosystem with a centralized orderbook and automated orders.

Products & Services

CLOB DEX - Permissionless, decentralized exchange protocol with automated orders built on top of Stellar. It uses an off-chain order book to provide a platform with a risk engine, matching engine, shared asset pools, and settlement on-chain. Using automated orders opens infinite trading possibilities. The issue we address: DEX trading often comes with high gas costs, fees, and slippage. Professional traders seldom use DeFi due to its lack of speed and liquidity. Derivative DEXs lack white-label solutions. Trading options are limited in their flexibility.

Smart Contract: The primary Smart Contract, the asset manager, facilitates account creation, permits the depositing and withdrawal of approved assets, and updates user balances on-chain following trade completions.

Off-Chain Engine: The Orderbook's Matching Engine operates off-chain, utilizing a smart settlement contract. It offers order handling and trade matching and manages the upload of executed trades back to the smart contract.

Automated orders: Automated orders, built on smart contract technology, are self-executing trades that enhance market efficiency and security. Each order autonomously acts on protocol triggers, ensuring safe transaction execution.

AUTOMATED ORDERS: Resilience, Fairness, and Soundness. Automated orders are designed using formal methods. In this case, these methods can be used to ensure that the orders are resilient (able to withstand shocks and stresses), fair (equitable to all participants), and sound (operating as intended without errors or vulnerabilities).

Self-Auditing Trading Code: By defining the domain of all possible interactions and actions, the code that governs these automated orders can be designed to audit itself. This means it can monitor its operations to detect and correct errors or vulnerabilities, enhancing its reliability and trustworthiness. The automated order is an advanced feature that will implement interfaces allowing users to easily specify desired automated orders without the need to understand deep bots programming.

A simple market order (swap) interface for selecting the trading pair and specifying the exchanged amount; a simple limit order interface for specifying the price bounds and the amounts of tokens to transact; a simple interface for scripting (JS) specifying: The interval, frequency, and parameters: Trading Strategy: Define parameters (e.g., moving average periods, thresholds for order placements, etc.) The logic for placing orders on the spot (e.g., buy low/sell high) The logic for entering/exiting perpetual swap positions based on leverage and risk management Execution: Place new orders or cancel old ones based on strategy Ensure risk management (e.g., avoid placing orders if balance/margin is low) JS Example: https://hackmd.io/@yGq0F7vpRemivOCoIltt0A/B1FfErS2h

An option strategy visualization graph, defining the underlying automated order by moving points on the graphical representation.

Requested Budget

$14.8K

Success Criteria

1. Understanding the Use Case: We are building a central limited order book DEX, and the concept is similar to dYdX with spot and perpetual trading (centralized order book and asset management with settlement using Soroban smart contracts). The unique feature we are adding to this is an automated order, a scripting bot infrastructure that helps create and manage a trading bot as widgets. 2. Interactions with Stellar and Soroban: The project will be fully built on Soroban infrastructure and utilize Stellar assets in trading operations. 3. Budget and Project Scope: We put updates into the budget in a budgeting form. 4. Clarify Stellar/Soroban Integration: In the reapplication, we provide the integration plan described in the scope. 5. Actual Development on Soroban: We put a more prominent description into the scope of work.