The CVEX Protocol places significant emphasis on trader interaction, with Frontends playing a vital role. They provide actual and historical market data, and facilitate various trading activities such as depositing and withdrawing collateral, and creating or cancelling orders to manage positions.

Order and Request Delivery Methods

The protocol offers distinct methods for order and request delivery:

  • Direct Protocol Transactions: This method is the most secure and censorship-resistant, offering the fastest execution but incurring gas costs payable in ETH. It also requires an Arbitrum account.

  • Frontend Messaging: Traders can send messages to a Frontend, which are then relayed to the protocol as meta-transactions. This approach eliminates the need for traders to spend any ETH or have an Arbitrum account, providing a seamless trading experience across different blockchains, including Base, Optimism, and Ethereum.

Compensation and Incentives

Frontends are compensated for the gas spent on delivering traders' requests by protocol, receiving a premium on top of the gas costs, funded by operational fees in USDC. This extra reward incentivises Frontend operators to enhance user experience and maintain high service standards.

By default, traders' messages must be signed within their wallets, with the protocol verifying the validity of these signatures to ensure proper authorisation before execution. However, traders can explicitly grant trusted Frontends permission to execute operations on their behalf without a signature, reducing operational costs and providing greater flexibility for trading strategies provided by frontends. Trusted frontends, including the CVEX Frontend, will enable the user to grant permission to the platform to make transactions for a limited period without an additional signature. Withdrawals will always require a signature.

Batch Ordering and Atomic Requests

Frontends can batch orders from multiple traders to further reduce gas consumption. They also may offer a relaxed mode for executing orders, when instant execution isn’t mandatory for trader. In this mode, a batch of orders, accumulated within a predefined time window (typically 30 seconds to 5 minutes), is sent to the protocol in a single transaction, significantly reducing operational fees per trade. Additionally, Frontends enable traders to batch multiple orders into a single atomic request, which is particularly useful for efficiently managing option positions with a hedge, such as vol trades, or for the execution of spreads / strategies.

Architectural Role and Compliance

The architecture where Frontends serve as intermediaries for relaying users' orders to the protocol enables effective implementation of legal requirements and restrictions. This setup allows Frontends to limit unwanted activities by enforcing specific compliance measures and user guidelines if these are required in their country of publication. Nevertheless, in line with the decentralised ethos of the CVEX Protocol, traders have always the option to directly interact with the protocol, bypassing the use of any frontend services.

Third Parties and Platform Incentives

It is anticipated, even encouraged, that third party trading platform providers will connect entities that include groups like Actant, Metatrader and Trading Technologies. Whilst there are some aspects of incentive for these provided by the protocol the majority of this incentive will come from the Platform.

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