Spark, a decentralized trading protocol, announced the first fully on-chain order book for the Ethereum ecosystem. Launching on Fuel Network, the project aims to provide solutions for some of the limitations in the Decentralized Finance (DeFi) landscape and offer traders fast, secure, and transparent trading with minimized state and reduced storage.
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Spark Brings First On-Chain Oder Books To The Ethereum Ecosystem
Decentralized trading protocol Spark is launching the Ethereum ecosystem’s first fully on-chain order book, seeking to offer traders a “secure, efficient, and decentralized” experience.
Per the announcement, the state-minimized order book will move execution fully on-chain to enhance transparency. Moreover, it’s set to reduce data storage and processing needs to ensure faster transactions without compromising security.
The Ethereum L2 project aims to address the limitations of Automated Market Makers (AMMS) and Centralized Exchanges (CEXs). Despite being instrumental in DeFi’s growth, AMMs struggle to meet the “advanced demands of institutional traders in high-frequency and algorithmic trading.”
Meanwhile, CEXs have been criticized for the lack of transparency and control expected in decentralized systems. The project argues that DeFi needs to use traditional trading mechanisms to attract institutional traders.
As a result, Spark will introduce Central Limit Order Books (CLOBs) to tackle these limitations. CLOBs are trading mechanisms used in traditional stock markets to match all bids and offers according to time priority and price.
With this implementation, Spark is set to provide better price discovery, faster execution, and deeper liquidity while maintaining security and transparency. Additionally, it seeks to offer “the precision and capabilities necessary for professional and institutional traders.”
Vitali Dervoed, Spark’s CEO and co-founder, highlighted the importance of order books for institutional and retail traders who seek accuracy and transparency while controlling their assets:
Order books are the backbone of professional, institutional, and advanced retail traders who rely on precise execution and transparency. Spark’s shift to on-chain trading represents a significant leap in eliminating the trade-offs associated with off-chain systems. With full visibility into order depth and liquidity,…
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