CLOB DEX - Automated Orderbook

[zealous cliff]

It's Herman, and I'm presenting CLOB DEX

https://docs.google.com/presentation/d/e/2PACX-1vQF3zVXRBKwKnlpJy66Uo1eHnrxwGGhtPS25aROSwtkqTY4kmqmjxYBo6i326SVHg/pub?start=false&loop=false&delayms=3000

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 complete with a risk engine, matching engine, shared asset pools, and settlement on-chain. Using automated orders opens infinite trading possibilities.

SERVICES

Spot Trading

Designed for quick transactions, enhanced security, and ease of use, spot trading offers an array of features.

Includes live updates on market trends, comprehensive lists of buy and sell orders, and visually intuitive trading diagrams.

Perpetual Futures Trading

Perpetual Futures Trading is a sophisticated financial instrument that lets users speculate on the future value of an asset without requiring them to own the asset outright.

This method introduces the concept of leverage, allowing users to control more substantial positions.

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.

[shrewd canyon]

Nice Work Herman! Good pitch today!

[zealous cliff]

Thanks!

[untold gull]

Hi, the GitHub links provided in the given URL https://dashboard.communityfund.stellar.org/scfawards/scf-20/communityvote/suggestion/122 appear to be empty. Have they not been updated?

In addition, the Figma files you submitted do not seem to belong to CLOB. Did you not provide the correct files? https://www.figma.com/file/tqYIYA0Rxtwf2qaTwdmE7d/Deridex?type=design&node-id=2006-97729&mode=design

[zealous cliff]

Hi,

Yes, we are currently developing this; we'll have an update at the end of this week. And yes, the design is correct; it's our internal naming that we are using, and they need a couple of updates.

And we are focusing now on faster smart contract part delivery.

[zealous cliff]

Hey, @untold gull @shrewd canyon
We updated the main repo and still need some fine-tuning, but main stuff is there:

https://github.com/Stogniev/CLOB-DEX-Collateral

[zealous cliff]

Hey,

I have feedback after voting. Unfortunately, your submission did not meet the requirements at this time and did not receive enough votes to receive Community Award funding.

For these reasons:

There wasn't enough information in response to prove any evidence of traction since the previous award.
The budget was very high, particularly because of insufficient information about progress.

Can you please elaborate more, because first:
I think it's a mistake because it's our first award, and we did not get anything.

And the second:
The budget is covering the development of a full DEX, so I think we cannot create an unfinished DEX, so this is why we have this budget.

[shrewd canyon]

Please try not to get discouraged and give up! I still see potential for this project. I'm sorry the vote didn't go positive for you, but I hope there is the chance for you to make updates and try again. Hopefully you can get some more community members to give feedback here too. This week I can take a closer look at your submission and your progress and try to give you pointers in our dm chat, or if appropriate here.

[zealous cliff]

Ok, just want to get more detailed feedback and potential next steps; thanks for the feedback and support!

[shrewd canyon]

Please ask in general and link to this thread so people are aware of your request too

[wild sierra]

I think that the by previous award it means the activation (10%). Did you receive this @zealous cliff ?

[zealous cliff]

Yes, just alina day before the demo, our plan was to build the collateral, and show designs and template for a fronted and matching engine. So we are on time, and all there.

Two repos are private for a frontend and matching engine, but I added GitHub accounts that are mentioned in the submission form

[shrewd canyon]

Please post all relevant links in this thread for us

[coarse sable]

I believe the reason most people didn't vote is due to the lack of detail in the GitHub . I think you would have a good chance if you have apply again after you have some more things in GitHub.

[shrewd canyon]

I think i saw some concern about the branding on your ui mockups too. I would make sure your submission matches the brand or mockup matches submission.

Totally understandable about the 1 day to complete the poi and sorry to hear that it took so long, but i know there are alot of people who do want to see this succeed. Rahim gave some great advice there.

[zealous cliff]

Ok, because we provided a lot of info and deliveries, in super short period of time, and now we get a proposal to wait till January, and I don't think we can continue to manage the team without support for this long time, and I don't want to lose this project for Soroban.

It's just not a lot of time to polish GitHub repos, and for January we already planned to have the first delivery, because we have Circle and Credit Agricol, who supports us waiting for delivery

Ok, I think we have an update 🙂

It's changes so fast 🙂

[shrewd canyon]

Yes good

I was confused by that.

[zealous cliff]

And thanks all for the great support, you are awesome 💯

And @shrewd canyon you especially 🙏

[shrewd canyon]

Thanks for building on stellar. Sorry for the disappointing news but dont give up. Perseverance pays off

[zealous cliff]

No disappointing, we are here to provide great products to the Stellar ecosystem, and I'm super excited 😉
I just want to move forward fast:)

[shrewd canyon]

Thats a great attitude. I think you can see your vision come to life if you push forward and looking forward to your updated submission in november. Make sure to work through it all and address any weaknesses and im sure you can find a win 😄 i dont think theres any other soroban dex projects even yet so you still have that advantage

[zealous cliff]

Hey everyone,

We have good updates for our Proof of Intent.

We are also participating in the testing week in the smart contracts repo: https://github.com/Stogniev/CLOB-DEX-Collateral (public).

There are links to the documentation:
https://clob-dex.gitbook.io/collateral.-quick-start/
https://clob-dex.gitbook.io/collateral.-contract-api/

Let me know if you can add some feedback.

We have updated designs with some polishing:
https://www.figma.com/proto/tqYIYA0Rxtwf2qaTwdmE7d/branch/mn1VmXu6QhwO6ZUVrMNH7h/Deridex?type=design&node-id=123-2766&t=dvak8FCNyH6LaFji-1&scaling=min-zoom&page-id=0%3A1&mode=design

This will be our main update till 3rd of December.

Also, I want to discuss our previous concern about the budget.
But as I mentioned, we planned after version 1 to present a fully functional spot trading protocol with integrated trading bots (https://app.ref.finance/orderbook/spot - this is the example of how it will look in 3 months).

Let me know your thoughts and feedback.

[digital cradle]

Eager to know more about it!!!

[zealous cliff]

Hey,
How it's going?

What are you interested in?

[digital cradle]

Het! I can see there is a lot info to learn more about what you are building! Let me have some time to understand more and I will bring specific questions.

[zealous cliff]

In two words, we are doing central limit order book and perpetual DEX solutions.
So, it's something similar to DyDX.

It uses an off-chain order book to provide a platform complete with a risk engine, matching engine, shared asset pools, and settlement on-chain.

We have two main trading services:
Spot Trading and Perpetual Futures Trading (marginal trading).

Our main unique feature is that we call automated orders. So, in two words, it's an on-chain script that uses formal methods to build a bot trading solution that ensures 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).

[alpine cloak]

I gota ask, is the actual name of this application CLOB-DEX?

[zealous cliff]

It's an internal naming, maybe we left just CLOB ;), our website is https://dclob.com/

[coarse sable]

@zealous cliff I thought it better to send this here instead of spamming the other channel.
you can access the order book with something like stellar term: https://stellarterm.com/exchange/XLM-native/USDC-www.centre.io

[zealous cliff]

Got it, thanks!

[zealous cliff]

Hey!

@coarse sable @abstract meadow

I saw your feedback here; thanks for the info and support. I have a few questions.
I took a look at the SDEX documentation, and I saw that a lot of pieces still need to be included.

It has limited trading, but it looks basic.

The main point here is that it does not support Stop loss/Take profit and Limits from Positions - it's crucial to build a liquidation mechanism for perpetual trading.

Conditional orders are essential for automated trading and trading bots, and they're missing (I'm talking more about time-in-force orders like Fill-or-Kill, etc.).

Also, I need help finding the cancellation option.

But this classic protocol may be critical to keeping aggregated liquidity. It's not highly updated now. We could communicate with a core team that works on this project. Our team can support this by adding functionality to help integrate perps, auto trading, and more novel Soroban stuff.

So, if you have some contact on this team, I'll be happy to chat.

@rare garden Or maybe you have some of your feedback here.

I'm trying to evaluate the optimal roadmap now.

Thanks!

[coarse sable]

I don't agree with everything you said but yeah in general I agree with you.

you can update an offer with this https://developers.stellar.org/docs/fundamentals-and-concepts/list-of-operations#manage-buy-offer

If I remember correctly, the big point against was that it didn't seem like you did your research and didn't know that stellar already has a order book, which made your SCF application look weird

[zealous cliff]

Yes, I got it.

I think the main issue is our limited orderbook; it's just the first step, or the first version, before perps and automatic orders, and it looks like it's just a duplication of the current DEX.
In our previous application, we focused more on the whole roadmap, and here, we focused more on version 1 and pure Soroban implementation.

So, I'll update our application more in a perp implementation vision.

[alpine cloak]

Quick Q, apologies if this has been asked, I see the exchange is listed as a DEX, but from what I can tell the exchange itself is off chain. If that's the case what part of the exchange is decentralized?

If the network cant validate the transactions of the exchange itself, but rather just track the off chain settlements, how is that decentralized?

Thanks!

[lost lodge]

Hello @zealous cliff how are you? I am checking your new submission.
How you are going to techincally do the perpetual trading feature of the DEX?

[abstract meadow]

👋 @zealous cliff Will the matching engine and risk engine be open source? As for matching engine, are you basing this on some existing platform? (I noticed this component being mentioned to be written in Go).

[twilit zephyr]

@zealous cliff
Also curious here - there's not much detail in the submission

Somewhat confused as you're still talking about a matching engine

Then there's this sentence
" Our approach for Stellar is to be a fiat to the crypto connector for our bridging ecosystem."
So are you building perps on Stellar's orderbook or using stellar as an onramp?

[zealous cliff]

Hey, Thanks for the questions!
Answering one by one.

[zealous cliff]

So, we have an off-chain matching engine with the user's signature on the off-chain message and an on-chain settlement. This is a quite standard process. First, we don't have any access to withdraw or move user funds on the on-chain level out of our collateral contract. The off-chain part only executes trades. The second, on-chain settlement part verifies the validity of orders.

We also have a sustainability mechanism. That means that if the matching engine or backend malfunctions, we have a mechanism that unlocks users' funds and provides the capability to withdraw all funds, even those that are locked for leverage.

[zealous cliff]

Hey,

About the technical part of perps.

First, we have a smart contract that operates as the collateral using USDC as the basic asset (Built on Soroban). The contract is here:
https://github.com/Stogniev/CLOB-DEX-Collateral

Then, we have an oracle (combined from multiple sources) that provides the index price for perpetual assets (LST, BTC, ETC, etc.). This index price is used for managing the funding rate (to stick to the Index price)

When the prices of perpetual deviate from the index/spot price of their corresponding assets (underlined assets), funding rates are paid out as periodic payments.

The standard process employs an 8-hour funding rate paid out periodically at 4 UTC, 12 UTC, and 20 UTC daily. The funding rate calculated during an 8-hour time frame is applied to the following interval.

These funding rates motivate traders to open short or long positions to help bring the prices of perpetual futures back, i.e., closer to the spot prices of their corresponding assets.

We are using off-chain settlement for the orderbook and matching engine (and also risk management).

The overall architecture is here:
https://clob-dex.gitbook.io/collateral.-contract-api/general-architecture-overview

We have a tool that is an indexer/operator that gets on-chan data on the one hand and posts batches of trades from the off-chain orderbook.
Here, we are using https://cubist.dev/ for key management.

For the leverage trading, we are using the next flow:

1. CLOB supports isolated margin, where each position can have its leverage level independent of others.
2. Leverage is set up per pair.

For the liquidation price, we use a formula that combines prices on a CLOB exchange and index price (mark price/oracle price) to protect traders from scam wicks.

[zealous cliff]

Hi,

You are right! About the Matching engine and risk management, yes, it will be open-sourced, and yes, we already have a matching engine core that we developed on Go by ourselves a couple of years ago, using https://github.com/HydroProtocol/hydro-scaffold-dex as a reference with the deep rebuild to be more scalable, sustainable, and chain agnostic.

[zealous cliff]

About the fiat part. As Perps uses stablecoins as a based asset (mainly USDC), we can easily integrate with the on-off ramp. We are building a perp trading dex on Soroban, but wants to use ramps to add flexibility and make the onboarding process easier.

[abstract meadow]

Thanks for the answers... last but not least, can you talk a bit abour your involvment with Orderly and your work in the NEAR ecosystem? @zealous cliff

[twilit zephyr]

If you're still using off-chain matching I'm a bit confused by this section of your grant application

"In response to the suggestion of leveraging existing infrastructure, we have revised our approach to integrate with Stellar's built-in CLOB DEX. This decision will streamline our efforts and enhance efficiency by avoiding unnecessary duplication of resources.

Furthermore, we have explored alternative strategies, including the development of a perpetual protocol on top of the DEX using Soroban for derivative tokens. We believe this approach not only better aligns with the ecosystem but also has the potential to generate greater community interest through unique trading opportunities.?"

[zealous cliff]

@abstract meadow Yes, we were tech partners in the early stages, mainly working with a smart contract ecosystem. And doing some advisory support. About the NEAR ecosystem, we have worked under different elements, like the Aurora incubation program, Wallet, IDE, Trading bots, and some early versions of part contracts for BOS.

[zealous cliff]

Yes, it's related to two things. First, we were originally thinking of making a spot trading, but now we are focused only on the perp. Second, regarding our unique features, we planned to present additional features to the main perp functionality.

This is:
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. So they're like on-chain vaults, for example, for algorithmic trading strategies, which can refer to liquidation, arbitraging, DMM, etc.

Leveraged collateral for perpetual trading to enhanced the user trading experience with high leverage. For example, to support high-risk pairs with 100x+ margins.

[sleek oasis]

Hey @zealous cliff we just got awarded by SCF to integrate DeFi protocols into our risk infrastructure and to create public community dashboards for them. I am currently conducting a prescreening of projects that are eligible to integrate. Would love to learn more about your project. Would you be up for a brief intro call? Feel free to DM me.

In our grant applications you find more information on our project: https://communityfund.stellar.org/project/alterscope

[shadow socket]

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[solemn zinc]

Hey guys

@zealous cliff

It looks like the deliverables are not on the idea section for SCF reviewers.

There is a google docs link, but it requires permission.

Figma is also keep loading for the interface. Not sure if it is working.

Can you please allow anyone with the link to access the deliverables docs?

Please ping me when it is accessable, because we need to do the review before Friday.

[tranquil elk]

@solemn zinc I saw the same thing -- we will reach out to them.

[solemn zinc]

Hey Anke! I think Gemma already did. The doc shouldn’t require a permission now

[tranquil elk]

I'm still catching up to yesterday's news-- thank you!

[fresh wolf]

This is a full stack, Rust engineer. I have rich experience with building Dapps and I am very familiar with Soroban. do you need developer for your project?

[zealous cliff]

Hey @fresh wolf please ping me in DM!

[azure ridge]

hello @zealous cliff
nice to meet you
i am a senior full stack and blockchain engineer with rich experience
could you please give me a chance to work with you?

sent FR

[zealous cliff]

Hey, @azure ridge

Thanks, I'll answer shortly

[azure ridge]

can you send DM me?

and please accept the FR

[eager holly]

Hi 👋
I’m Sammy Evans
Nice project 💯
I’d love to support your project and your Team with my web3 and crypto skills as a Community Manager/ Moderator and a Project marketer, giving insight on how to grow your project and spread brand awareness to tons of web3 enthusiasts and community via social media platforms and content creation.

It would be a pleasure working and support your team to make this project Successful 🤝🏼🤝🏼

[spiral zinc]

Hello, @zealous cliff
what about the progress of the project?

[zealous cliff]

Hey!
I think the best way, is to track our GitHub right now:

We have a primitive of Soroban on-chain orderbook(PoW), that can be used for your projects also.

https://github.com/Stogniev/CLOB-DEX-Collateral/tree/dev

We planning to launch our POC demo, approx in the end of this month.

[zealous cliff]

Hey, yes definitely let's chat. I missed your message somehow...

[spiral zinc]

oh, it's just updated
cool

[eager holly]

Thanks for reviewing my application, I’ll send you a DMs now. 🤝🏼

[eager holly]

Couldn’t Dm but I sent a friend request, you’ll need to accept it for me to be able to message you.

[naive furnace]

@zealous cliff pls check dm

[shadow solstice]

Gmgm can we connect ? we plan to develop a Yield bearing stablecoin on Stellar

[marsh sigil]

Very interesting.
I have rich experience in coin development on Stellar.
Let's discuss about your project.