Carbon DeFi introduces a new way to trade onchain with Automated Recurring Limit Orders.
Strategy makers on Carbon have the ability to create two separate limit orders, one to buy a token and the other to sell a token, at whatever price points they choose.
These two orders are then linked together. Linked orders result in acquired funds automatically rotating between them, creating an endless trading cycle without need for manual intervention.
Whether partially or fully filled, trades are irreversible, and makers no longer need to worry about an order being undone should the market retrace. Tokens will only be available to take at the price specified by the maker. Because the price quoted by the maker is exactly what they receive when the trade is executed, makers suffer no slippage on filled orders. In addition, makers on Carbon DeFi pay no gas when the trade is executed, and there are currently no maker fees on Carbon. And thanks to the irreversible nature of orders on Carbon DeFi, MEV sandwich attacks are impossible to execute.
Order Prices:
For each order, makers have the ability to choose a single specified price or a range of prices to buy and sell their tokens.
The option to create a range limit order has multiple benefits. For example, makers on Carbon DeFi now have the means to scale in or out of a position without the need to create multiple orders within two desired price points.
Single limit order example: Buy $ETH at $1600.
Range limit order example: Buy $ETH between $1625 and $1575.
If a range order is filled, partially or completely, the cost basis for the specified range is equal to the geometric mean of the highest and lowest price boundaries where a trade took place.
Single limit order example: Buy $ETH at $1600. Cost basis equals $1600 per $ETH.
Range limit order example: Buy $ETH between $1625 and $1575. Cost basis equals $1599.80 per $ETH.
Funding:
Makers have the option to fund one or both orders.
With zero obligation to fund both orders, users have the ability to create a limit order with funds they don’t yet have.
For example, a maker may create an $ETH/$wBTC automated recurring limit order as follows:
Set a specific price for an $ETH buy order funded with 1 $wBTC. Set a specified price for a $wBTC sell order funded with zero $ETH. These orders are now linked.
As the $wBTC is traded for $ETH, the newly acquired $ETH automatically rotates to fund the sell order. This $ETH is now available for takers to trade against at the desired price originally set by the maker at the time of creation.
Management:
After a strategy is created, it will appear on the “My Strategies” page.
Carbon DeFi provides makers with multiple ways of easily managing automated recurring limit orders in a gas efficient manner.
Modify Pricing: Modify pricing allows makers to quickly adjust the prices they choose to buy and sell their tokens, all without having to cancel orders, withdraw funds, redeposit funds, and create new orders.
Add Funds: Funds may be added to existing buy and/or sell orders at any point.
Withdraw Funds: Withdraw partial or full funds. Makers may wish to downsize their position and withdrawing partial funds allows for this without the need to withdraw full funds, cancel orders, redeposit funds, and recreate orders.
Withdrawing full funds is an option for makers who may wish to trade this token pair in the future. Withdrawing, rather than deleting, gives makers the ability to create a similar strategy in the future without the need to re-mint an NFT.
Pause: Pausing trading means tokens within automated recurring limit orders are no longer available for takers to trade against.
Unpause: Reactivate trading at the maker’s desired price points.
Delete: Makers may delete orders they no longer wish to use and will not be returning to in the future.
Security
Automated recurring limit orders are native to Carbon DeFi and require no oracles or hooks, eliminating the risk of oracle extractable value (OEV) and other major security concerns in DeFi. In addition, Carbon DeFi had undergone three extensive audits prior to release.
Create your first Automated Recurring Limit Orders now at Carbon DeFi!
Additional Resources on Carbon DeFi and Automated Recurring Limit Orders
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Interested in collaborating with Carbon DeFi? We’d love to hear from you. Please reach out at bizdev@Bancor.network
Automated Recurring Limit Orders Explained was originally published in CarbonDeFi on Medium, where people are continuing the conversation by highlighting and responding to this story.
