Application Stack

  1. 1.
    Base Layer: An anonymous-by-default PoS chain, that acts as a L2 to Ethereum.
  2. 2.
    zk-Matchbook: A trustless matching engine design for a private limit order-book relayer.
  3. 3.
    Twilight Pool: A private liquidity pool design with a single token exposure.

What is a Twilight Pool?

In traditional financial markets, exchanges offer lit-pools and/or dark pools. In case of an ATS (alternative trading system), they operate a twilight pool, where partial information about the trade is revealed after some pre-defined time period. These pools may reveal price, trade direction or partial bids/offers in the books. Twilight is an effort to bring twilight pools to DeFi. For our construction details, refer to:

What are inverse futures?

Inverse futures quote the contract in USD but settle in BTC, which makes the P&L calculation non-linear. A good example is Bitmex with an inverse payout structure. Twilight allows traders to open and settle orders using wBTC, where solvency of the positions are tracked by zk-Matchbook with a continuous price feed. For detailed specification, refer to perpetual futures guide.

Why is Twilight built as a PoS base layer? Can't you verify proofs on Ethereum?

Ethereum does not support arbitrary curves, and would not support efficient verification using Ristretto group. Hence the base layer acts as an L2 that allows running an arbitrary stateless VM on a web server and relay zk-proofs to its validators, where every block updates the Utreexo Forest. Tx Inclusion proof in this forest is verified on Ethereum.
Last modified 3yr ago