DEX infrastructure

An order book is a coin’s list of orders: bids to buy and asks to sell, each priced in ROO, the network’s token. Every coin has one book. For a connected coin, one on a foreign chain Amaroo images, the book is kept on the simplex chain that images that coin’s chain.

There is one book per coin, not one per pair. Going from one coin to another takes two trades, one on each coin’s book, with ROO in between. The book is chain state, so any node can read it at any block.

Orders rest on chain until they match. A bid locks the ROO it will spend. An ask, an offer to sell a coin from a foreign chain, locks ROO as collateral: a deposit the seller loses if they don’t pay.

Every block, each book matches at one clearing price, the price at which the most volume can trade. Everyone matched in that block gets that price, so being first or fastest within a block buys no better price.

After a match, the seller pays on the foreign chain, in one payment carrying a marker that ties it to the match. Once the payment is buried deep enough there, at a depth set for each chain, anyone can submit the proof of payment. Amaroo checks it against its imaged headers and releases the buyers’ ROO to the seller. If the seller never pays, a timeout gives the buyers their ROO back, plus a share of the seller’s collateral. The most anyone can lose is one leg of one open trade.

SDEX trades settle on the chains the assets live on, with no custodian. Your assets are traded and signed by your keys, from your wallet, and no party signs on your behalf. While a trade settles, the ROO it locks is held in escrow by the protocol.

OTC, over the counter, is a trade agreed between two parties instead of taken off the public book. A maker opens an offer and escrows ROO in it, priced off the book with a premium, an adjustment the maker sets. A buyer pays the maker on the foreign chain, and the proof of that payment releases the ROO to the buyer. The OTC path is designed so a first trade needs no ROO and no collateral.

A fee buys a place in a block. Every transaction you send pays the network fee, in ROO: placing or canceling an order, moving ROO between simplex chains, submitting a proof. The match a block writes pays none. Payments on other chains pay those chains’ own fees, and there is no exchange fee.

Liquidity is orders, not parked capital. Users, desks and miners post it, and the depth you see is what is resting on the book now. Market makers rest bids and asks on both sides of a book and earn the spread, the gap between the prices they buy and sell at.

A pool holds both assets of a pair and prices every trade along a curve, spreading capital across prices where no one is quoting. A book holds only orders: prices someone is willing to trade at. There is no curve to slide down: an order trades at its price or better, or it waits, and each block clears at one price. Why Amaroo makes the longer argument.