Path to Decentralization

Rollup Self-Custody Integration

The first step for decentralizing Quiver will be an integration with a secure, cheap custody solution.

We are currently in talks to integrate Quiver with some rollups. Integration will be relatively simple and follow a generic pattern:

  • Users seeking self-custody will deposit directly into a Quiver contract.

  • Afterwards they will generate a special signing key on their front-end.

  • Alongside every order, users (or the front-end app) will sign a message with this key.

  • A special service will be built to settle trades on-chain, by calling the rollups APIs with the finalized trades alongside the signed messages attesting to its validity.

  • A special service will be built to perform on-chain withdrawals, and to deal with forced trades/withdrawals.

Because much of this requires a trusted front-end, Quiver will make available an open-source front-end at a secure location (using ENS and IPFS).

Long-Term Vision

There are other important properties of decentralized exchanges that are harder to obtain. Among these are censorship resistance, and permissionless creation of new markets. This needs to be achieved without sacrificing cheap transactions, trading efficiency, and scalability.

Censorship resistance requires that a decentralized consensus exists over order matching. This is only possible if consensus includes requests such as new orders and order cancellations (potentially thousands of requests per second). It is clear that data availability for such a large number of requests will need to be done at a layer separate from Ethereum itself. However, there can be economic and consensus guarantees inside Ethereum that such data will be available.

Low-latency trading requires a centralized sequencer, and this seems to contradict censorship resistance. However, it is possible to use on-chain inclusion lists to bypass censorship, as well as open up composability. This will allow users to have either low-latency trading or full decentralization (although not both) when interacting with Quiver.

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