Please describe your proposed solution.
We assert that, given the existing off-chain execution systems, Cardano currently lacks the readiness to bring a substantial number of users into its DeFi ecosystem (aka readiness for the next bull run). This limitation arises due to potential challenges for end users in the face of high traffic influx.
In response to this, we present a framework, to be developed in Rust and offered as a fully open-source solution. This framework is designed to be adopted and integrated by other dApp teams, providing widespread utility throughout the entire Cardano DeFi ecosystem. Its primary goal is to markedly reduce costs per order for end users and, concurrently, elevate the throughput to a level that ensures a seamless experience.
At Spectrum Labs, we are dedicated to decentralization, and consequently, the framework itself will embody principles of openness, transparency, and decentralization—aligning with the historical approach we have maintained with all our open-source products.
Green Orders
In the current dApps one order is usually represented as 2 on-chain transactions. We can call the first transaction an “order placement” and the second one a “verification + execution”. Thus the end user a) pays for order execution (so-called “batcher” fees) and b) twice pays network fees. This is not ideal.
To enhance the efficiency and cost-effectiveness of the off-chain execution system, as well as to significantly diminish the cost per order, we are streamlining the process by eliminating the necessity for on-chain order placement. Instead, we encode these orders into a message, which is then relayed off-chain to the designated executors. These off-chain orders, referred to as "green," incur zero on-chain overhead. The message's structure is depicted below:
To execute off-chain orders effectively, an on-chain entity is essential for validating execution and facilitating the release of user funds without direct user interaction. Hence, we introduce an Autonomous Account (AA) utilizing eUTxO — an on-chain entity capable of reading order messages, validating execution, and releasing the necessary user funds for deal execution. Users engaging with AA are required to deposit funds earmarked for trading, akin to a deposit made to a centralized exchange (CEX) but without relinquishing custody of their funds.
Since now only 1 on-chain transaction is required per order (in the current systems there are 2 on-chain transactions) the ensuing benefits of this modification include:
- Reduction in on-chain data storage
- Elimination of previously required fees for placing on-chain orders
- Significant increase in throughput
- Reduction in Cardano P2P layer utilization
Autonomous Account
An interoperable Autonoumus Account with an arbitrary number of applications is shown in the figure below. The burden of order validation is now delegated to an external script.
The API of AA is described in the figure below:
Explore more about Autonomous Account and Green Orders in the Spectrum Bloom: A self-developing, sustainable, eUTxO-native framework for decentralized finance white paper.
The solution can prove advantageous for various user categories, and our focus will center on three key groups:
- End users (both longstanding and new members of the Cardano ecosystem engaged in DeFi) stand to gain by seamlessly utilizing Cardano dApps even during periods of high traffic. Additionally, they can enjoy minimal fees for their transactions.
- Established dApp teams have the opportunity to embrace and integrate this solution with their smart contracts. This integration promises heightened throughput and reduced fees, serving as additional selling points for their products.
- Developers can benefit by studying the open-sourced code base of a production-ready solution, contributing to increased enthusiasm within the ecosystem as a whole.