The 0x Project is building a protocol for decentralized exchange of ERC20 tokens. They’ve got a ton of community support, launched their own ZRX token with great success, and now companies like ours, The 0cean, are building liquidity pools and relayers. The ecosystem is growing.
The 0x protocol is designed for off-chain order books, and there some areas in the flow that we think could be improved with a novel approach, inspired by conversations with the 0x core dev team, that we call ‘high performance funnel’ (HPF). We have built HPF into The 0cean and it will premier with our public beta in the next few weeks or so (API draft available now).
A high performance funnel approach solves two problems:When someone wants to take an order that’s posted in an order book, there is a delay between the moment they declare that intent and the time when the order is settled on the blockchain. The HPF allows The 0cean to keep the order book up to date during this period thereby avoiding orders being taken by multiple users. By closing this gap, a funnel also prevents collisions, where takers pay wasted gas to fill an order that’s not actually available.Takers don’t have to interact with smart contracts on the blockchain, they only need to sign the order and they are good to go.
How The High Performance Funnel Works
The high performance funnel model for a 0x order means that every order submitted to our order book will indicate the Funnel Address as the taker for that order.
First, a trader submits a ‘target order’ which is like a limit order in the traditional sense. You specify the price and amount you want to trade.
Next, someone else sees that order and decides they want to take you up on your offer. They submit a ‘matching order’, which is like a traditional market order in that it takes existing orders.
Finally, the funnel address, which is specified as the taker on both ...