Trading Mechanisms

Overview

AssetSwap's trading mechanisms represent a revolutionary approach to automated trading, combining advanced order types, intelligent liquidity aggregation, and sophisticated execution strategies. Our system enables institutional-grade trading capabilities while maintaining user control and transparency.

Order Types and Execution

Basic Order Types

Market Orders

Immediate execution at the best available price:

class MarketOrder {
    async execute(params) {
        const { inputToken, outputToken, amount, user } = params;
        
        // Find optimal route across all liquidity sources
        const route = await this.router.findBestRoute({
            inputMint: inputToken,
            outputMint: outputToken,
            amount: amount,
            mode: 'EXACT_IN'
        });
        
        // Check price impact
        if (route.priceImpact > MAX_PRICE_IMPACT) {
            throw new Error(`Price impact too high: ${route.priceImpact}%`);
        }
        
        // Execute swap
        const result = await this.executor.swap({
            route: route,
            userPublicKey: user.wallet,
            slippageBps: 300 // 3% default slippage
        });
        
        return {
            executed: true,
            inputAmount: amount,
            outputAmount: result.outputAmount,
            price: result.outputAmount / amount,
            txHash: result.signature
        };
    }
}

Limit Orders

Execute when price reaches specified level:

class LimitOrder {
    constructor() {
        this.orderBook = new OrderBook();
        this.matcher = new OrderMatcher();
    }
    
    async place(params) {
        const order = {
            id: generateOrderId(),
            user: params.user,
            type: 'LIMIT',
            side: params.side, // BUY or SELL
            tokenPair: params.pair,
            price: params.price,
            amount: params.amount,
            status: 'PENDING',
            createdAt: Date.now(),
            expiresAt: params.expiry || Date.now() + 30 * 24 * 60 * 60 * 1000
        };
        
        // Add to order book
        await this.orderBook.add(order);
        
        // Attempt immediate matching
        const matches = await this.matcher.findMatches(order);
        
        if (matches.length > 0) {
            await this.executeMatches(order, matches);
        }
        
        return order;
    }
}

Advanced Order Types

Conditional Orders

AssetSwap supports 30+ trigger conditions for sophisticated trading strategies:

enum TriggerType {
    // Price Triggers
    PRICE_ABOVE = 'price_above',
    PRICE_BELOW = 'price_below',
    PRICE_CROSSES = 'price_crosses',
    
    // Volume Triggers
    VOLUME_ABOVE = 'volume_above',
    VOLUME_SPIKE = 'volume_spike',
    
    // Liquidity Triggers
    LIQUIDITY_ABOVE = 'liquidity_above',
    LIQUIDITY_BELOW = 'liquidity_below',
    
    // Score-based Triggers (AI-powered)
    SECURITY_SCORE_ABOVE = 'security_score_above',
    MOMENTUM_SCORE_ABOVE = 'momentum_score_above',
    SENTIMENT_SCORE_POSITIVE = 'sentiment_score_positive',
    
    // Holder Metrics
    WHALE_ACCUMULATION = 'whale_accumulation',
    RETAIL_FOMO = 'retail_fomo',
    SMART_MONEY_ENTRY = 'smart_money_entry',
    
    // Technical Indicators
    RSI_OVERSOLD = 'rsi_oversold',
    MACD_BULLISH_CROSS = 'macd_bullish_cross',
    BOLLINGER_BREAKOUT = 'bollinger_breakout',
    
    // Custom Conditions
    CUSTOM_FORMULA = 'custom_formula'
}

Implementation Example

class ConditionalOrderEngine {
    async evaluateCondition(order) {
        const evaluator = this.getEvaluator(order.triggerType);
        const currentValue = await evaluator.getCurrentValue(order.token);
        
        switch (order.triggerType) {
            case 'WHALE_ACCUMULATION':
                return await this.evaluateWhaleAccumulation(order, currentValue);
            
            case 'SENTIMENT_SCORE_POSITIVE':
                return await this.evaluateSentiment(order, currentValue);
            
            case 'CUSTOM_FORMULA':
                return await this.evaluateCustomFormula(order, currentValue);
            
            default:
                return evaluator.compare(currentValue, order.triggerValue);
        }
    }
    
    async evaluateWhaleAccumulation(order, data) {
        const whaleActivity = {
            largeTransfers: data.transfers.filter(t => t.amount > 100000),
            newWhaleAddresses: data.newHolders.filter(h => h.balance > 100000),
            netWhaleFlow: data.whaleInflow - data.whaleOutflow
        };
        
        // Sophisticated whale accumulation detection
        const accumulationScore = 
            (whaleActivity.largeTransfers.length * 0.3) +
            (whaleActivity.newWhaleAddresses.length * 0.3) +
            (whaleActivity.netWhaleFlow > 0 ? 0.4 : 0);
        
        return accumulationScore >= order.triggerValue;
    }
}

Stop-Loss and Take-Profit

Automated risk management orders:

class RiskManagementOrder {
    async placeStopLoss(position, stopLossPercent) {
        const stopPrice = position.entryPrice * (1 - stopLossPercent / 100);
        
        const order = await this.orderService.create({
            type: 'STOP_LOSS',
            token: position.token,
            amount: position.amount,
            triggerType: 'PRICE_BELOW',
            triggerValue: stopPrice,
            action: 'MARKET_SELL',
            user: position.user
        });
        
        // Link to position for tracking
        await this.linkOrderToPosition(order, position);
        
        return order;
    }
    
    async placeTakeProfit(position, takeProfitPercent) {
        const targetPrice = position.entryPrice * (1 + takeProfitPercent / 100);
        
        const order = await this.orderService.create({
            type: 'TAKE_PROFIT',
            token: position.token,
            amount: position.amount,
            triggerType: 'PRICE_ABOVE',
            triggerValue: targetPrice,
            action: 'MARKET_SELL',
            user: position.user
        });
        
        return order;
    }
}

Time-Based Strategies

Dollar-Cost Averaging (DCA)

class DCAStrategy:
    def __init__(self, token, total_amount, intervals, period):
        self.token = token
        self.total_amount = total_amount
        self.intervals = intervals
        self.period = period
        self.amount_per_interval = total_amount / intervals
        
    async def execute(self):
        for i in range(self.intervals):
            # Execute buy order
            await self.buy_token(
                self.token,
                self.amount_per_interval
            )
            
            # Wait for next interval
            await asyncio.sleep(self.period / self.intervals)
        
        return {
            'total_invested': self.total_amount,
            'average_price': self.calculate_average_price(),
            'tokens_acquired': self.total_tokens
        }

Time-Weighted Average Price (TWAP)

class TWAPExecutor {
    async execute(order) {
        const { amount, duration, intervals } = order;
        const sliceSize = amount / intervals;
        const intervalDuration = duration / intervals;
        
        const executions = [];
        
        for (let i = 0; i < intervals; i++) {
            const startTime = Date.now();
            
            // Execute slice with minimal market impact
            const result = await this.executeSlice({
                amount: sliceSize,
                maxPriceImpact: 0.1 // 0.1% max impact per slice
            });
            
            executions.push(result);
            
            // Wait for next interval
            const elapsed = Date.now() - startTime;
            const waitTime = Math.max(0, intervalDuration - elapsed);
            await sleep(waitTime);
        }
        
        return this.aggregateExecutions(executions);
    }
}

Liquidity Aggregation

Multi-Protocol Integration

AssetSwap aggregates liquidity from 20+ protocols:

const LIQUIDITY_SOURCES = {
    SOLANA: [
        'Jupiter',
        'Raydium',
        'Orca',
        'Saber',
        'Marinade',
        'Mercurial',
        'Serum',
        'Phoenix'
    ],
    ETHEREUM: [
        'Uniswap',
        'SushiSwap',
        'Curve',
        'Balancer',
        '0x Protocol'
    ],
    CROSS_CHAIN: [
        'Wormhole',
        'Allbridge',
        'Portal'
    ]
};

Smart Routing Algorithm

class SmartRouter:
    def find_optimal_route(self, input_token, output_token, amount):
        # Step 1: Discover all possible paths
        paths = self.discover_paths(input_token, output_token)
        
        # Step 2: Calculate output for each path
        path_outputs = []
        for path in paths:
            output = self.simulate_path(path, amount)
            path_outputs.append({
                'path': path,
                'output': output,
                'price_impact': self.calculate_impact(path, amount),
                'fees': self.calculate_fees(path)
            })
        
        # Step 3: Optimize for best output after fees
        best_path = max(
            path_outputs,
            key=lambda x: x['output'] - x['fees']
        )
        
        # Step 4: Check if splitting provides better results
        split_route = self.optimize_split(
            paths,
            amount,
            target_impact=0.5  # Max 0.5% price impact
        )
        
        if split_route['output'] > best_path['output']:
            return split_route
        
        return best_path
    
    def optimize_split(self, paths, amount, target_impact):
        # Use convex optimization to find optimal split
        from scipy.optimize import minimize
        
        def objective(splits):
            total_output = 0
            for i, split in enumerate(splits):
                if split > 0:
                    output = self.simulate_path(paths[i], split * amount)
                    total_output += output
            return -total_output  # Negative for minimization
        
        # Constraints: splits sum to 1, all non-negative
        constraints = [
            {'type': 'eq', 'fun': lambda x: sum(x) - 1},
            {'type': 'ineq', 'fun': lambda x: x}
        ]
        
        # Initial guess: equal split
        x0 = [1/len(paths)] * len(paths)
        
        result = minimize(objective, x0, constraints=constraints)
        
        return self.construct_split_route(paths, result.x, amount)

Cross-Chain Execution

AssetSwap enables seamless trading across multiple blockchain networks:

Intelligent Bridge Selection\n- Automatically identifies optimal bridge routes between chains\n- Considers bridge fees, speed, and security ratings\n- Selects most cost-effective cross-chain execution paths\n\nMulti-Step Execution\n- Handles complex multi-chain trading sequences\n- Coordinates swaps and bridges automatically\n- Ensures atomic execution across chain boundaries\n\nUniversal Asset Access\n- Trade any supported token on any supported chain\n- Automatic token bridging when necessary\n- Unified interface regardless of underlying complexity\n\nCost Optimization\n- Minimizes total fees across all transaction steps\n- Optimizes for speed vs cost based on user preferences\n- Provides transparent fee breakdown before execution

Execution Optimization

MEV Protection

Protecting users from Maximum Extractable Value attacks:

class MEVProtection {
    async protectTransaction(transaction) {
        // 1. Private mempool submission
        if (this.hasPrivateMempool(transaction.chain)) {
            return await this.submitToPrivateMempool(transaction);
        }
        
        // 2. Commit-reveal scheme for Solana
        if (transaction.chain === 'SOLANA') {
            return await this.executeCommitReveal(transaction);
        }
        
        // 3. Flashbots for Ethereum
        if (transaction.chain === 'ETHEREUM') {
            return await this.submitToFlashbots(transaction);
        }
        
        // 4. Time-based randomization
        await this.randomDelay(0, 5000); // 0-5 second random delay
        
        return await this.standardSubmission(transaction);
    }
    
    async executeCommitReveal(transaction) {
        // Phase 1: Commit
        const commitment = this.hashTransaction(transaction);
        const commitTx = await this.sendCommitment(commitment);
        
        // Wait for commitment confirmation
        await this.waitForConfirmation(commitTx);
        
        // Phase 2: Reveal (after random delay)
        await this.randomDelay(1000, 3000);
        
        const revealTx = await this.revealTransaction(
            transaction,
            commitment
        );
        
        return revealTx;
    }
}

Gas Optimization

Solana Fee Sponsorship

class FeeSponsorship {
    async sponsorTransaction(user, transaction) {
        // Check if user qualifies for sponsorship
        const qualification = await this.checkQualification(user);
        
        if (!qualification.eligible) {
            return { sponsored: false, reason: qualification.reason };
        }
        
        // Calculate sponsorship amount
        const feeEstimate = await this.estimateFees(transaction);
        const sponsorshipAmount = this.calculateSponsorship(
            feeEstimate,
            qualification.tier
        );
        
        // Create sponsored transaction
        const sponsoredTx = await this.createSponsoredTransaction({
            originalTx: transaction,
            sponsor: this.sponsorAccount,
            sponsorshipAmount: sponsorshipAmount,
            user: user
        });
        
        // Track sponsorship for analytics
        await this.trackSponsorship({
            user: user.id,
            amount: sponsorshipAmount,
            transaction: sponsoredTx.signature,
            tier: qualification.tier
        });
        
        return {
            sponsored: true,
            amount: sponsorshipAmount,
            transaction: sponsoredTx
        };
    }
    
    checkQualification(user) {
        const qualificationCriteria = {
            TIER_1: {
                minVolume: 10000,     // $10k monthly volume
                minTrades: 50,        // 50 trades per month
                sponsorshipRate: 1.0  // 100% sponsorship
            },
            TIER_2: {
                minVolume: 5000,      // $5k monthly volume
                minTrades: 25,        // 25 trades per month
                sponsorshipRate: 0.5  // 50% sponsorship
            },
            TIER_3: {
                minVolume: 1000,      // $1k monthly volume
                minTrades: 10,        // 10 trades per month
                sponsorshipRate: 0.25 // 25% sponsorship
            }
        };
        
        // Evaluate user against criteria
        for (const [tier, criteria] of Object.entries(qualificationCriteria)) {
            if (user.monthlyVolume >= criteria.minVolume &&
                user.monthlyTrades >= criteria.minTrades) {
                return {
                    eligible: true,
                    tier: tier,
                    sponsorshipRate: criteria.sponsorshipRate
                };
            }
        }
        
        return { eligible: false, reason: 'Does not meet minimum criteria' };
    }
}

Parallel Execution

class ParallelExecutor {
    async executeMultipleOrders(orders) {
        // Group orders by independence
        const groups = this.groupIndependentOrders(orders);
        
        const results = [];
        
        for (const group of groups) {
            // Execute independent orders in parallel
            const groupPromises = group.map(order => 
                this.executeWithRetry(order)
            );
            
            const groupResults = await Promise.allSettled(groupPromises);
            results.push(...groupResults);
        }
        
        return this.processResults(results);
    }
    
    groupIndependentOrders(orders) {
        const groups = [];
        const processed = new Set();
        
        for (const order of orders) {
            if (processed.has(order.id)) continue;
            
            const group = [order];
            processed.add(order.id);
            
            // Find other orders that can execute in parallel
            for (const other of orders) {
                if (processed.has(other.id)) continue;
                
                if (this.canExecuteInParallel(order, other)) {
                    group.push(other);
                    processed.add(other.id);
                }
            }
            
            groups.push(group);
        }
        
        return groups;
    }
}

Market Making

Automated Market Making

class AutomatedMarketMaker:
    def __init__(self, pair, spread=0.002, depth=10000):
        self.pair = pair
        self.spread = spread  # 0.2% spread
        self.depth = depth     # $10k depth on each side
        self.orders = {'buy': [], 'sell': []}
        
    async def maintain_market(self):
        while self.active:
            # Get current mid price
            mid_price = await self.get_mid_price()
            
            # Cancel existing orders
            await self.cancel_all_orders()
            
            # Place new orders with dynamic spread
            spread = self.calculate_dynamic_spread()
            
            # Buy orders
            buy_price = mid_price * (1 - spread/2)
            await self.place_ladder_orders(
                'buy',
                buy_price,
                self.depth,
                levels=5
            )
            
            # Sell orders
            sell_price = mid_price * (1 + spread/2)
            await self.place_ladder_orders(
                'sell',
                sell_price,
                self.depth,
                levels=5
            )
            
            # Wait before next update
            await asyncio.sleep(10)  # Update every 10 seconds
    
    def calculate_dynamic_spread(self):
        # Adjust spread based on volatility and inventory
        base_spread = self.spread
        volatility_adjustment = self.get_volatility_adjustment()
        inventory_adjustment = self.get_inventory_adjustment()
        
        return base_spread * (1 + volatility_adjustment + inventory_adjustment)

Trade Settlement

Atomic Settlement

class AtomicSettlement {
    async settleTradeAtomic(trade) {
        const instructions = [];
        
        // 1. Transfer tokens from seller
        instructions.push(
            Token.createTransferInstruction(
                trade.seller.tokenAccount,
                trade.escrow,
                trade.seller.publicKey,
                trade.amount
            )
        );
        
        // 2. Transfer payment from buyer
        instructions.push(
            Token.createTransferInstruction(
                trade.buyer.paymentAccount,
                trade.seller.paymentAccount,
                trade.buyer.publicKey,
                trade.payment
            )
        );
        
        // 3. Transfer tokens to buyer
        instructions.push(
            Token.createTransferInstruction(
                trade.escrow,
                trade.buyer.tokenAccount,
                this.escrowAuthority,
                trade.amount
            )
        );
        
        // Create atomic transaction
        const transaction = new Transaction().add(...instructions);
        
        // Sign and send
        const signature = await this.connection.sendTransaction(
            transaction,
            [trade.seller.keypair, trade.buyer.keypair]
        );
        
        return { settled: true, signature };
    }
}

Conclusion

AssetSwap's trading mechanisms represent the most advanced decentralized trading infrastructure available today. Through our comprehensive order types, intelligent routing, and sophisticated execution strategies, we enable users to trade with the precision and efficiency previously available only to institutional traders.

Our system's ability to aggregate liquidity across multiple protocols and chains, combined with advanced features like MEV protection and gas sponsorship, ensures that users always receive the best possible execution. The continuous evolution of our trading algorithms through machine learning ensures that the platform becomes more efficient over time.

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