Open-Source Rapid DEX: Batcher-less, instant, with transaction chaining

[GENERAL] Name and surname of main applicant

Catalyst Rider

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

5

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

We will create an AMM DEX with direct pool interactions, eliminating batchers. This enables instant trade execution, removes slippage, reduces fees, and improves user gains and decentralization.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No dependecies

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

The contracts, libraries, backend and frontend code will be open-source, with MIT license

[METADATA] Horizons

DeFi

[SOLUTION] Please describe your proposed solution

We are building Rapid DEX, a decentralized exchange designed to simplify liquidity management, improve efficiency, and maximize decentralization for the Cardano ecosystem. Unlike existing AMM DEXes that rely on batchers and factories, Rapid DEX removes these intermediaries to allow for direct interaction with liquidity pools, lowering fees, reducing delays, and providing greater control for users. This approach aims to create a more competitive and open trading environment while addressing key issues like batching costs and complexity. By using direct interactions and treating each pool as an individual entity without requiring factories, Rapid DEX significantly reduces the infrastructure setup and associated costs. By empowering users to directly engage with the system, Rapid DEX ensures that liquidity provision and trading are both streamlined and user-centric.

Rapid DEX is ideal for a variety of use cases where efficiency, flexibility, and cost reduction are critical. One key use case is frequent traders who seek to minimize transaction fees and avoid delays inherent in the traditional batching model. By enabling direct pool interactions, Rapid DEX reduces swap times and costs, making it particularly useful for high-frequency trading strategies.

Rapid DEX will benefit ADA holders and investors by improving trading efficiency and reducing fees, making Cardano more attractive. DeFi traders and liquidity providers gain from instant execution, lower fees, and reduced slippage. Emerging projects can create liquidity pools easily and affordably, fostering early adoption. Established projects benefit from competitive liquidity and collaboration. DEX aggregators see improved value through competitive fees, while stake pool operators (SPOs) gain from increased transaction volumes. Finally, DAOs and DeFi enthusiasts get easy access to pool creation, boosting DeFi participation and decentralization.

Pool creation

Existing AMM DEXes use sophisticated smart contracts called Factories, which prevent multiple pools for the same token pairs. Interaction with these Factories adds complexity, running costs, and transaction fees. To simplify usage, foster competition and reduce running costs and fees, Rapid DEX allows direct pool creation without Factories.

When creating a pool, users can set the swap fee in the pool UTxO datum. Higher fees can attract liquidity providers seeking better returns but may result in fewer swaps, while lower fees can boost swap volume, potentially giving the pool a competitive edge on DEX aggregators.

Swapping and liquidity management

Provided tooling will prepare the transaction, which directly interacts with the pool UTxO, allowing users to simply execute the interaction without needing to perform calculations themselves. Existing DEXes rely on batchers, which require users to create a request that is then batched together with others and applied to the pool UTxO directly. In contrast, Rapid DEX allows users to interact with the pool directly, reducing delays and eliminating the need for centralized batching, thus making the process more efficient, decentralized, and reducing transaction costs, as transactions are smaller and only one needs to be performed.

If multiple users attempt to modify the same pool within the same block, transaction chaining ensures that these transactions can still be processed. Transaction chaining is a mechanism that allows multiple transactions, which depend on each other, to be included within the same block. This ensures a smooth, sequential execution of trades even when multiple users interact with the same pool simultaneously.

Unlike the batching model, where users often receive different swap outcomes due to batch execution delays (effectively turning the transaction into a limit order), Rapid DEX ensures that users always execute their trades based on the known pool state at the time of submission. This prevents undesired outcomes and eliminates the need for users to reclaim transactions, which would otherwise incur additional costs.

If a transaction fails, the user will receive a simple notification that the pool has been updated, and the UI will reflect the new pool state without any disruptive errors.

ADA Staking

ADA staking is the process of delegating ADA tokens to a stake pool to help secure the Cardano blockchain and earn rewards in return. In the context of a liquidity pool, ADA held in the pool can also be staked, allowing the liquidity providers to earn staking rewards. This means that the liquidity in the pool not only provides trading functionality but also generates additional returns through staking.

In Rapid DEX, the stake key is embedded in the address of each pool UTxO. This configurable setup ensures efficient management of staking rewards from the liquidity pool, while maintaining core functionality and providing liquidity to traders.

Farming

Anyone can add tokens from a token pair to the pool, making these contributions public. This incentivizes token issuers to contribute directly, as it provides immediate rewards to liquidity providers rather than relying on promises. These contributions are visible in the APR (Annual Percentage Rate) calculations, which will reflect real, past donations, adding transparency and trust.

Token issuers can still signal future rewards by including metadata when creating the pool, but the instant nature of these rewards—untied to epochs—immediately increases the value of LP tokens. Furthermore, liquidity providers are not required to lock their LP tokens in a farming contract, giving them more flexibility and control over their assets while still benefiting from rewards.

Upgradeability

Migration to newer contracts can be done without a migration-agent. Just create a Tx withdrawing liquidity from this version of pools and adding to the next version of the contracts, with a change back to the user wallet.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

The Rapid DEX will improve Cardano DeFi by:

• Reducing Transaction Costs: Eliminating batching fees and simplifying the validations lowers the cost of small swaps, making them more efficient.
• Real-Time Execution: Users benefit from instant transactions, avoiding slippage and delays.
• Boosting DeFi Participation: Easier access to swaps and liquidity incentives attract more users and projects, expanding the ecosystem.
• Enhancing Decentralization: By allowing anyone to create pools without a centralized factory and agents, the DEX encourages a more decentralized trading environment, where multiple pools for the same tokens can compete freely, increasing resilience and user choice.

The groups that benefit from this proposal:

ADA Holders and Investors: Rapid DEX offers a more efficient trading mechanism by removing batchers and reducing fees, which increases the potential return on swaps. The improvement in transaction efficiency and cost reduction may enhance the attractiveness of Cardano's DeFi space, leading to a higher value perception of ADA, encouraging more investments.

DeFi Traders and Liquidity Providers: Traders benefit from instant execution, reducing slippage and transaction fees, which makes frequent trading strategies more viable and cost-effective. Liquidity providers gain increased control over fee structures and staking, while not being required to lock up LP tokens, enhancing their earning opportunities while maintaining flexibility.

Emerging Projects and Token Issuers: New projects that need liquidity for their tokens benefit from an easy-to-set-up DEX without the need for complex factory setups. The ability to create liquidity pools quickly fosters token adoption and market formation, allowing emerging projects to focus on growth rather than overcoming technical barriers.

Established Projects: Projects already operating within the Cardano ecosystem can use Rapid DEX as a platform to engage in competitive farming, provide liquidity incentives, and expand their token's utility within DeFi. This strengthens the overall ecosystem and can lead to increased cross-project collaboration and integration.

DEX Aggregators: With Rapid DEX, aggregators gain a more competitive trading environment to integrate. Since pools compete openly on swap fees, aggregators can offer better pricing and routing options to their users, increasing user engagement and enhancing the aggregators' reputation for providing optimal trading routes.

Stake Pool Operators (SPOs): Increased activity driven by reduced fees and improved trading experiences will result in higher transaction volumes on the Cardano network. This increase in network activity translates into higher staking rewards and more transactions to process, benefiting SPOs and adding value to the Cardano staking model.

Community-Driven DAOs and DeFi Enthusiasts: DAOs and community-driven projects benefit from the increased decentralization and transparency Rapid DEX provides. By making pool creation accessible without factories or batchers, DAOs can leverage the protocol for community-driven liquidity initiatives, expanding DeFi participation and enhancing Cardano's resilience against centralization risks.

Broader Cardano Community: The entire Cardano ecosystem will benefit from increased accessibility to decentralized trading and liquidity solutions. By simplifying interactions and removing barriers for users and projects alike, Rapid DEX contributes to a more active and diverse DeFi landscape. This, in turn, enhances Cardano's position as a leading blockchain for DeFi, attracting more participants, projects, and liquidity. The open-source nature of Rapid DEX also contributes to community knowledge sharing, allowing developers and enthusiasts to innovate further upon the platform's foundation.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

As WingRiders, we have a track-proven record of developing within the Cardano ecosystem. Over the years we’ve shown to be at the forefront of technological advancements when it comes to DEXes and Cardano in general. We were the first ones to bring support for Stableswaps, have a fully on-chain DAO governance, launched the first trustless non-custodial launchpad and recently V2 smart contracts with optimized transaction batching, new features such as Routed Swap, PathFinder, ZapIn/ZapOut and much more. All along the way we were working with Cardano data encoded in CBOR. Created a lot of open source tooling and continues to push the edge of what is possible with the Cardano chain evolving. 

Regarding fund management, we adhere to rigorous protocols ensuring robust financial stewardship and accountability. Our practices encompass the maintenance of transparent financial records, periodic internal audits, and strict compliance with financial reporting standards. We understand the imperative nature of prudent fund management and commit to upholding the highest standards of fiscal responsibility throughout the project's lifecycle.

As evidence, we have 2 Catalyst proposals from F10 and F11 with Proof of Achievement submitted and approved for all completed milestones except the final milestones, which are in progress. Two proposals from F12 are having Milestones 1 and 2 submitted ahead of the schedule. 

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

Smart Contracts Development

• Description: Develop the smart contracts for pool creation, swapping, and liquidity management. This includes the AMM logic, UTxO handling, and initial ADA staking mechanics.
• Output: Smart contracts deployed and tested on Cardano testnet.
• Acceptance Criteria: Users can create pools and perform swaps on the testnet, with successful interactions verified.
• Evidence: Smart contracts provided in the open source GitHub repository. Transaction hashes of all relevant smart contract interactions provided.
• Timeline: 1 month

MVP Backend/Frontend Development

• Description: Develop the minimal viable product (MVP) for backend and frontend, allowing users to interact with pools. Includes pool creation, basic swapping functionalities, aggregation into a database, and a simple UI for testing.
• Output: A functional testnet version of the platform with basic features and a user interface.
• Acceptance Criteria: Users can create pools, perform swaps, and interact with liquidity management via the frontend on testnet.
• Evidence: Code provided in the open source GitHub repository. Instructions on how to run the code locally and perform all relevant actions.
• Timeline: 2 months

Backend Optimization

• Description: Optimize backend processes, including implementing transaction chaining to handle concurrency and websocket integration for real-time updates of pool UTxOs.
• Output: Enhanced backend performance, ensuring smooth transaction handling and real-time pool state propagation.
• Acceptance Criteria: Backend can handle multiple concurrent transactions efficiently, and users see pool updates in real-time through the UI.
• Evidence: Code updated in the GitHub repository. Instructions on how to verify multiple concurrent transactions.
• Timeline: 2 weeks

Tracking Endpoints and Enhanced Frontend

• Description: Implement detailed tracking endpoints (for metrics like TVL, swap volumes, etc.) and enhance the frontend with features such as performance analytics, history of pool state, and a more polished UI.
• Output: Detailed performance tracking and enhanced user experience on both frontend and backend.
• Acceptance Criteria: Tracking metrics are accessible via the frontend and backend, providing insight into the platform’s performance. Enhanced UI features are live.
• Evidence: Code updated in the GitHub repository. Instructions on how to run the code and verify new frontend features.
• Timeline: 2 months

Project Close-out Report and Project Close-out Video

• Description: Create Project Close-out Report and Project Close-out Video.
• Timeline: 1 week
• Outputs:
• A 2/3 page written summary Project Close-out Report’.
• Short video ‘Project Close-out Video’.
• Acceptance Criteria:
• Project Close-out Report’ listing KPIs and how they were (or were not) addressed and what the next stage plans are with the product or service that was developed.
• ‘Project Close-out Video’ outlining the project achievements and deliverables.
• Evidence:
• Final project report available on a publicly-accessible link.
• Video available on a publicly accessible link.

[RESOURCES] Who is in the project team and what are their roles?

WingRiders engineering team is composed of experienced professionals in blockchain technology and software development. Our team members stand behind projects like Adalite, Yoroi wallet, Emurgo’s first blockchain explorer/indexer, firmware for hardware wallets Trezor and Ledger (bringing them to Cardano), and WingRiders DEX and LaunchPad.

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

Milestone 1: Smart Contracts Development

1. Milestone Budget: ₳ 45,000
2. Resource MDs: 
3. Software engineer (senior & junior): 25
4. Project manager: 3

Milestone 2: MVP Backend/Frontend Development

1. Milestone Budget: ₳ 65,000
2. Resource MDs: 
3. Software engineer (senior & junior): 40
4. Project manager: 3

Milestone 3: Backend Optimization

1. Milestone Budget: ₳ 20,000
2. Resource MDs: 
3. Software engineer (senior & junior): 12
4. Project manager: 3

Milestone 4: Tracking Endpoints and Enhanced Frontend

1. Milestone Budget: ₳ 40,000
2. Resource MDs: 
3. Software engineer (senior & junior): 22
4. Project manager: 3

Milestone 5: Project Close-out Report and Project Close-out Video

1. Milestone Budget: ₳ 10,000
2. Resource MDs: 
3. Marketing Specialist: 6
4. Project manager: 1

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

Efficient Resource Use:

The budget reflects standard blockchain development rates, ensuring fair compensation for skilled developers while maintaining cost efficiency. The team is small but specialized, allowing for rapid, high-quality progress, moreover it has experience with transaction chaining, which makes this DEX “rapid”

High Impact:

Rapid DEX will reduce transaction costs, improve liquidity, and enhance DeFi participation on Cardano. By eliminating batching fees, it will make small swaps more efficient, benefiting users and driving more transactions to Cardano.