DEX

With cross-chain bridging and darkpool DEX then DarkFi would be a very attractive trading tool.

We currently have OTC swaps which are an efficient way to settle trades on-chain. But there needs to be an orderbook for matching counterparties.

We propose that this job can be performed by an order-matching bot which maintains an orderbook. Later this role can be split with MPC.

The order-matching party needs to be able to construct the swap trade, even when the LP is offline.

We propose to do this using the spend hook and a special auth_otc function. The auth_otc basically says:

• The sender of the funds has the right at any time to withdraw liquidity and cancel the LP.
• The funds are delegated to the order-matching party but with restrictions:
  • Can only make an OTC swap tx using the funds.
  • The trade parameters are completely specified such as the price and currencies.

The funds are therefore delegated to the order-matching party, who finds counterparty offers and executes the trades settling them on-chain. Both parties receive their funds in a trustless anonymous manner. At any time the LP can be canceled and funds withdrawn.