DEX - Distributed Exchange Specification

Overview

This repository contains the complete technical specification for a production-grade distributed cryptocurrency exchange. All specifications are frozen at version 1.0.0 and ready for implementation.

PHASE 0: SPEC FREEZE ✅ COMPLETE

Completion Date: February 16, 2024
Total Specifications: 20
Status: All specifications frozen and production-ready

Specifications

#	Specification	Description
00	Spec Freeze v1.0	Official freeze document
01	Order Lifecycle	Complete order flow from creation to settlement
02	Order States	State machine with transition matrix
03	Trade Lifecycle	6-phase trade execution and settlement
04	Account State Model	Multi-asset balance and position tracking
05	Margin Methodology	Initial/maintenance margin with leverage tiers
06	Liquidation Process	Liquidation mechanics and auto-deleveraging
07	Fee System	Maker-taker model with volume-based tiers
08	Event Taxonomy	Comprehensive event types and schemas
09	Service Boundaries	9 microservices with clear responsibilities
10	Failure Recovery	Crash recovery and idempotency patterns
11	Replay Requirements	Deterministic state reconstruction from events
12	Determinism Rules	Forbidden operations and mandatory practices
13	Timestamp Policy	Nanosecond precision exchange clock
14	Sequence Numbering	Global monotonic event ordering
15	Settlement Cycle	T+0 real-time gross settlement
16	Custody Assumptions	Hot/cold wallet architecture
17	Governance Hooks	Multi-signature admin controls
18	Rate Limit Policy	Token bucket with DDoS protection
19	Security Invariants	Critical financial and operational guarantees

Key Features

🎯 Deterministic by Design

• Fixed-point arithmetic (no floating point)
• Monotonic timestamps and sequence numbers
• Deterministic event replay capability
• No random operations or external dependencies

⚡ High Performance

• Throughput: 100,000 orders/sec per symbol
• Latency: < 10ms trade execution (p99)
• Matching: < 500μs (p99)
• Settlement: T+0 (immediate)

🔒 Security First

• Multi-signature wallet controls (3-of-5 hot, 5-of-7 cold)
• Proof-of-reserves (weekly Merkle tree)
• Insurance fund for liquidation shortfalls
• Rate limiting and DDoS protection
• Immutable audit trail

📈 Scalable Architecture

• Event sourcing pattern
• Microservices (9 core services)
• Horizontal scaling capability
• Multi-region deployment ready

Architecture

┌─────────────────┐
│   API Gateway   │  ← Entry point (HTTP/WebSocket)
└────────┬────────┘
         │
    ┌────┴────┬──────┬────────┬─────────┬───────┐
    │         │      │        │         │       │
┌───▼──┐ ┌───▼───┐ ┌▼─────┐ ┌▼──────┐ ┌▼────┐ ┌▼────────┐
│Order │ │Account│ │Match │ │Settle │ │Risk │ │Liquidity│
│ Svc  │ │  Svc  │ │Engine│ │  Svc  │ │ Svc │ │   Svc   │
└──────┘ └───────┘ └──────┘ └───────┘ └─────┘ └─────────┘

Technology Recommendations

• Matching Engine: Rust (performance-critical)
• Services: Rust or Go
• Database: PostgreSQL (primary), Redis (cache)
• Event Store: Kafka or PostgreSQL event sourcing
• Monitoring: Prometheus + Grafana

Implementation Roadmap

Phase 1: Foundation (Months 1-2)

• Determinism rules
• Timestamp service
• Sequence generator
• Event store

Phase 2: Core Trading (Months 3-4)

• Order service
• Matching engine
• Trade settlement
• Fee calculation

Phase 3: Risk Management (Months 5-6)

• Account service
• Margin calculator
• Liquidation engine
• Insurance fund

Phase 4: Production Ready (Months 7-8)

• Wallet service
• Governance controls
• Rate limiting
• Security hardening

Phase 5: Launch (Month 9)

• External audit
• Regulatory approval
• Production deployment
• Public launch

Compliance

• ✅ Deterministic (reproducible state)
• ✅ Auditable (immutable event log)
• ✅ Recoverable (replay from events)
• ✅ Secure (multi-sig, rate limits)
• ✅ Compliant (KYC/AML ready)

Testing Requirements

• Unit tests: 80% coverage minimum
• Integration tests: All critical paths
• Property-based tests: Invariant validation
• Chaos tests: Failure scenario handling
• Performance tests: Throughput and latency

Getting Started

For Implementers

1. Read Spec Freeze document
2. Review implementation priorities
3. Set up development environment
4. Start with foundation specs (12, 13, 14, 08)
5. Follow test-driven development

For Reviewers

1. Review specifications in order (01-19)
2. Verify determinism guarantees
3. Check security invariants
4. Validate performance targets
5. Submit errata via GitHub issues

Contributing

This is a frozen specification (v1.0.0). Changes require:

• RFC (Request for Change) submission
• Technical review
• Approval process
• Version bump (breaking = major, additions = minor)

License

[To be determined]

Contact

Project Repository: https://github.com/6829nkhpas/DEX

---

Status: ✅ Specification Complete | Ready for Implementation