SNX Limit Orders (Pending Audit)
Summary
We propose a trustless architecture for adding limit orders functionality to the Synthetix Exchange that would not require any changes to the core contracts.
Abstract
To keep the integrity of the core Synthetix contracts in place, we propose the creation of a separate layer of “advanced mode” trading contracts to enable additional functionality. The primary contract is a limit order contract. The exchange users can place limit orders on it and send the order source amount to it. Additionally, they specify the parameters of limit orders, including destination asset price, allowed slippage and execution fees.
Motivation
To increase the flexibility of the Synthetix exchange, limit order functionality is needed so users can effectively trade synthetic assets. While limit orders can be trivial to implement in the case of centralized exchanges, in the case of a DEX such as Synthetix, limit orders can be challenging in terms of security guarantees and trustlessness due to client unavailability.
Specification
Rationale
Limit Order Execution Nodes
By allowing anyone to run “limit order execution nodes” and compete for limit order execution fees, we achieve order execution reliability and censorship-resistance through permissionless-ness. These are especially important in the context of limit orders, where censorship or execution delays might cause trading losses.
Upgradability
We use an upgradable proxy pattern in order to allow a present owner address to upgrade the core implementation contract at any time.