KittenSwap (5): Dynamic Limit Orders Using AMM Information

1. The Problem with Usual Limit Orders

It is well-known that there are arbitrage opportunities in an OrderBook DEX. As an example:

  • Assume the current uniswap price is 1 TOKEN = 0.1 ETH.
  • Assume there is a limit order of BUY 1 TOKEN @ 0.08 ETH.
  • Assume there is a limit order of SELL 1 TOKEN @ 0.12 ETH.

2. Our Solution

In our new design, you will be able to create dynamic limit orders such as:

  • BUY 1 TOKEN @ MIN(0.08 ETH, PriceUniswap).
  • SELL 1 TOKEN @ MAX(0.12 ETH, PriceUniswap).
  • If PriceUniswap goes lower to 0.05 ETH, then the BUY order will automatically become lower: BUY 1 TOKEN @ 0.05 ETH.
  • If PriceUniswap goes higher to 0.15 ETH, then the SELL order will automatically become higher: SELL 1 TOKEN @ 0.15 ETH.

3. More Benefits

Our method here has more benefits.

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