⚒️Solution Designs

This is a section for a further deep dive into our solution designs, explaining the rationale of the supported trade on DeltaDeFi from perspectives covering technology, liquidity, and user experience.

Order Type Design

DeltaDeFi Protocol Supports All Possible Order Type

DeltaDeFi can empower all order types existing in traditional finance theoretically. However, at the initial stage, we will only support limit order and market order as there are exponential increments in software engineering complexity when we integrate the characteristics of UTxO blockchain transaction with order book design, in achieving the core value proposition of no order management fee and instant order finality.

Fixed Lot Sizes Technically-Neatly Improve Liquidity

DeltaDeFi imposes fixed trading lot sizes, a practice borrowed from traditional financial markets to enhance market liquidity by standardizing trading sizes. This approach also addresses technical issues on the UTxO blockchain, such as UTxO dust, simplifying UTxO management.

Order Matching Rule Design

Single Price-Time Priority Rule Ensures Trading Fairness

We employ the simplest and most widely used order matching rule, uniformly in DeltaDeFi - price-time priority. We will always provide the best price on the opposite side for the users in the scenario of filling orders (e.g. market order, enhanced limit order, etc). In case there are multiple orders with the same best price, first-in-first-out will be applied.

Order Information Design

Personally Identifiable Information (PII) Is Protected For Unfilled Actions

DeltaDeFi processes order flow and serves as a privacy layer for traders, which is crucial in professional trading to prevent exposing sensitive information to other market participants. Transparent order activities, with masked personally identifiable information (PII), are essential for a healthy financial market. DeltaDeFi allows traders to extract their market action history and aggregated, PII-masked market data, ensuring privacy and transparency.

Full Market Order Flow Transparency and Immutability

To maintain a fair market, DeltaDeFi supports information immutability, enabling verification of adherence to the order matching rules. As a blockchain-based protocol, DeltaDeFi ensures that filled orders have permanent records, including details of the involved wallet addresses, providing a transparent and immutable transaction history.

Order Acknowledgement Mechanism Design

Order Committed at Transaction Building, Acknowledged at Submission

Order acknowledgment occurs upon transaction submission, with trade confirmation happening before blockchain confirmation. This mechanism prevents other transactions from consuming inputs, providing instant order finality and supporting high-frequency trading.

Order Confirmation Before Blockchain Confirmation (Settlement)

DeltaDeFi introduces instant order finality by confirming trades prior to blockchain confirmation. This mechanism involves thoroughly checking all input conditions before submitting the transaction, ensuring that no other transactions can consume the input beforehand. By implementing this approach, DeltaDeFi can provide users with immediate results, significantly enhancing the high-frequency trading capabilities of the platform.