CFD DEX and Flash Trillions

Screenshots

Problem Statement

Contracts for Difference (CFD) are trading instruments in which the underlying asset is not touched. Upon entry of a position, an entry price is recorded, and upon exit, the difference between the exit and entry price determines the payout. Actually, an “Average Entry Price” calculation is maintained, so that the trader can freely increase or decrease the position, end even flip it from long to short, etc., yet the payout amount can be calculated at any time from the quantity held and the Average Entry Price. In order to achieve extremely efficient liquidations, the protocol allows for “Flash Trillions”, i.e. borrowing of large amounts of funds which do not even exist, all without any fees. This is especially important when obscure illiquid instruments are traded.

Solution

The contracts are written in Solidity, and the front end in JavaScript / Next.js and Chakra. Chainlink is used as an oracle for liquidation reference prices. Since the DEX is based on Order Books, it is important that it runs on a very inexpensive L1 blockchain such as Gnosis or L2 blockchains such as zkEVM, Optimism, zkSync, Scroll, Mantle, Taiko, etc. Deployed on all above networks, along with IPFS pinned web3 dapps.