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Batch Auctions on Plasma

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Research�Area

Paper released

Scalable

Market Mechanisms

Batch Auction

Plasma Implementation

DKG,�Snarks,�A. Sig.

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Batch auctions for 2 tokens: [A,B]

Orders �A -> B

Orders �B -> A

EXCHANGE RATE A VS. B

TRADING VOLUME [A]

OPTIMAL PRICE

Collect orders over a pre-defined time

Generation of order-book

Calculate the optimal price

Settle all orders with the optimal price

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Ring trades

SELL A FOR B

---

SELL B FOR C

SELL C FOR A

A

B

C

Ring

Trades

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Multi-dimensional order-books

PRICE A/B

TRADING VOLUME

PRICE B/C

PRICE C/A

TRADING 3 TOKENS

OPTIMAL UNIFORM �CLEARING PRICE

Executing all ring-trades at the best possible price

A

B

C

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Multi-token batch auction mechanism

p(B|A)

p(C|B)

Order can trade any token against any token

B

C

D

E

A

...

Order collection for 3 minutes

Computation of uniform clearing prices, i.e.

Maximum trading volume
Arbitrage-freeness:

p(C|B) * p(B|A) = p(C|A)

Constraints:

Sum of tokens X sold equals sum � of tokens X bought (for all tokens)

Settlement of orders

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Batch auctions

on plasma

Expectation for the plasma exchange:

3 min batch time
60k orders capacity per batch
100 tps capacity built on plasma MVP
Per trade gas costs are reduced significantly

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Auctions with Plasma MVP

ROOT-CHAIN

PLASMA-CHAIN

Operator calculates �prices, trading volumes �and trade-outputs

ORDER COLLECTION

S

�TX�

Order

�TX�

Order

�TX�

Order-hash submission

SETTLEMENT

Plasma operator accepts orders over 3 minutes

Plasma operator closes a batch by submitting the �final order-book-hash on �the root-chain

Operator settles trades �on plasma and starts accepting new orders

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Auctions with Plasma MVP

ENCRYPTED ORDER �COLLECTION

TX

�TX

TX

Orders

Sig.

Out-B

Result

PRICE �CAL-�CULATION

DOUBLE�-SIGNING

DKG public key

TX

Upon request

TRADE

SETTLEMENT

VIA PLASMA-EXIT��(optional)

Orders

Bitmap

DKG private key

Prices + proofs

Volume-list

Auction-outputs

Next�Batch

starts

ROOT-CHAIN

PLASMA-CHAIN

Volume-hash

Prices + proofs

Private key

Bitmap

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Auctions with Plasma MVP

ENCRYPTED ORDER �COLLECTION

TX

�TX

TX

Orders

Sig.

Out-B

Result

PRICE �CAL-�CULATION

DOUBLE�-SIGNING

DKG public key

TX

Upon request

TRADE

SETTLEMENT

VIA PLASMA-EXIT��(optional)

Orders

Bitmap

DKG private key

Prices + proofs

Volume-list

Auction-outputs

Next�Batch

starts

ROOT-CHAIN

PLASMA-CHAIN

Volume-hash

Prices + proofs

Private key

Bitmap