Decentralized Clearing Network: A Protocol for Hybrid Decentralized Exchanges
merklex.io
merklex.io
- Is DCN a smart contract where centralized exchanges push settlement groups to (say once every x minutes)? This would indeed allow for fast offchain matching while settling onchain. However the CEX needs to feed in all signatures from all traders, resulting in a big bloat nonetheless (ETH blockchain is over 1TB right now).
- This would require users to lock funds not just in the DCN, but tell the DCN at what specific exchanges these funds can be spent. If not a user can give 2 exchanges the same signature (to the same funds locked in DCN) and trade the same funds twice.
"Is DCN a smart contract where centralized exchanges push settlement groups to (say once every x minutes)?"
Yes, currently merkleX pushes settlement groups after the matches reach an age of 1 hour. So in practice, about one every hour for each market.
"However the CEX needs to feed in all signatures from all traders, resulting in a big bloat nonetheless (ETH blockchain is over 1TB right now)."
Ideally the amount of signatures a user provides will be much less then the amount they trade. For example you could set a limit preventing buys of Ethereum over 200 and sells under 100. That limit on trading could over trading for a week. It's a balance between trust of the exchange and load on the network. The power comes from giving the user the choice.
"This would require users to lock funds not just in the DCN, but tell the DCN at what specific exchanges these funds can be spent. If not a user can give 2 exchanges the same signature (to the same funds locked in DCN) and trade the same funds twice."
Yeah, good find. That's a current limitation and does make it harder to move between exchanges on the DCN.