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Stockholm: Real-World Asset Price Aggregator Protocol

Deployed Contract address : mantra1jpnrk92gm23p3nj6f7dj6m3mt52fgmmda0n2sx0yxal64cgma77q80l8q9

1. Introduction

Stockholm Poster

Stockholm is an innovative protocol designed to address key challenges in the decentralized finance (DeFi) space, particularly focusing on Real-World Assets (RWAs).

Problem Statement:

  1. Fragmented Liquidity: As real-world assets are tokenized across various platforms, liquidity becomes scattered, making it difficult for traders to find the best prices and execute large trades efficiently.
  2. High Transaction Costs: DeFi trading often suffers from high gas fees and significant slippage, especially for larger transactions or when dealing with less liquid assets.
  3. Inefficient Price Discovery: The lack of a unified platform for RWAs leads to inconsistent pricing across different exchanges, making it challenging for traders to determine fair market values.

Solution:

Stockholm aims to solve these issues by:

  • Aggregating liquidity from multiple sources to create deeper, more efficient markets for RWAs.
  • Implementing advanced pathfinding algorithms to optimize trade routes and minimize costs.
  • Providing a single interface for users to access the best prices across various decentralized exchanges (DEXs).

2. Market Opportunity

The DeFi and tokenized asset markets present significant growth potential for Stockholm.

Market Size:

  • The DeFi market has experienced exponential growth, with billions of dollars in Total Value Locked (TVL) across various protocols.
  • The market for tokenized real-world assets is projected to reach multi-trillion dollar valuations, indicating vast untapped potential.

Potential:

  • Integration of RWAs: Stockholm aims to bridge the gap between traditional finance and DeFi by facilitating efficient trading of tokenized real-world assets.
  • Untapped Markets: Significant opportunities exist in sectors such as real estate, commodities, and various financial instruments that are yet to be fully integrated into the DeFi ecosystem.

3. Stockholm Overview

Stockholm is designed as a comprehensive solution for trading RWAs in the DeFi space.

Definition:

A real-world asset price aggregator protocol that leverages liquidity from various decentralized exchanges to provide optimal trading outcomes for users.

Key Features:

  1. Liquidity Aggregation: Combines liquidity from multiple sources to enhance market depth and efficiency, ensuring users get the most favorable prices for their trades.
  2. Price Optimization: Utilizes advanced pathfinding algorithms to determine the best prices across various DEXs, reducing slippage and improving trading efficiency.
  3. Cost Efficiency: Minimizes transaction costs through efficient contract execution and by combining multiple trades into single transactions where possible.
  4. User Convenience: Simplifies the trading process by providing a single platform for accessing multiple DEXs, ensuring a smooth and efficient exchange experience.
  5. Security: Leverages the robust security features of the Cosmos ecosystem and CosmWasm smart contracts to ensure safe and reliable transactions.

4. Technology Stack

Stockholm leverages CosmWasm and the MANTRA Chain to build a secure, scalable, and interoperable protocol.

Why CosmWasm and MANTRA?

mantra_chain

  1. Interoperability:

    • Facilitates cross-chain communication, allowing Stockholm to interact with multiple blockchains.
    • Enhances liquidity and market reach by tapping into various ecosystems.

  2. Scalability:

    • High throughput ensures fast and efficient transaction processing, critical for real-time price aggregation.
    • Low latency reduces delays, providing users with timely and accurate price information.

  3. Security:

    • Rust programming language ensures memory safety, preventing common vulnerabilities.
    • CosmWasm's design minimizes risks associated with smart contract execution.

  4. Modularity:

    • Allows for easy upgrades and feature additions through its modular architecture.
    • Facilitates seamless integration with other protocols and services within the Cosmos ecosystem.

5. Technical Architecture

Stockholm's architecture is designed to efficiently aggregate prices and execute trades across multiple DEXs.

WhatsApp Image 2024-06-18 at 20 04 02_ba562a0f

Components:

  1. Price Aggregation Engine:

    • Collects and aggregates real-time price data from multiple decentralized exchanges.
    • Ensures comprehensive market coverage for accurate price discovery.

  2. Transaction Executor:

    • Responsible for executing optimized trades on behalf of users.
    • Interacts with various DEXs to complete transactions based on the optimal path.

  3. Dijkstra's Algorithm:

    • Implemented to determine the most efficient trading paths.
    • Considers factors such as gas fees, slippage, and liquidity depth to optimize trades.

6. How it Works

Stockholm's operation can be broken down into four main steps:

  1. User Interaction:

    • Users submit trade requests through Stockholm's interface, specifying the RWA they wish to trade.

  2. Price Aggregation:

    • The price aggregation engine collects real-time price data from multiple connected DEXs.
    • Creates a comprehensive view of the market for the specified RWA.

  3. Pathfinding:

    • Dijkstra's algorithm analyzes the collected data to find the most efficient and cost-effective trading paths.
    • Considers various factors including gas fees, slippage, and available liquidity.

  4. Execution:

    • The transaction executor processes the trade based on the optimal path determined.
    • Interacts with the necessary DEXs to complete the transaction.
    • The user receives the best possible price for their trade, benefiting from Stockholm's aggregation and optimization.

7. Stockholm Ecosystem

Stockholm's ecosystem consists of three key components that work together to enable efficient RWA trading:

Key Components:

  1. Portable Decentralized Identifiers (DIDs):

    • Fundamental component for establishing trust and authenticity in RWA tokenization.
    • Enables secure and verifiable identity management across different platforms.

  2. Real-World Asset (RWA) Oracles:

    • Specialized data providers that bridge the gap between off-chain real-world data and on-chain smart contracts.
    • Ensure accurate and up-to-date information for RWA pricing and status.

  3. Stockholm Engine:

    • Core component that enables trading of tokenized assets among RWA-focused DEXs.
    • Integrates the DIDs and RWA Oracles to facilitate secure and efficient transactions.

8. Use Cases

Stockholm caters to various stakeholders in the DeFi and RWA ecosystems:

MANTRA Ecosystem:

  • Integration with MANTRA RWA tokens: Provides easier access to a broader range of tokenized assets within the MANTRA ecosystem.
  • Integration with Vaults and Pools: Enhances liquidity and trading options by connecting with existing MANTRA financial products.

For Investors:

  • Improved Liquidity: Access to deeper liquidity pools for trading RWAs, enabling larger trades with less price impact.
  • Better Prices: Benefit from optimized price discovery and execution across multiple DEXs.

For Institutions:

  • Efficient Trading: Secure and efficient trading of high-value assets, suitable for large-scale operations.
  • Cost Savings: Reduced transaction costs and minimized slippage, improving overall trading profitability.

For Retail Traders:

  • Market Access: Easier access to a broader range of tokenized assets, including those that might be difficult to trade on traditional platforms.
  • Competitive Pricing: Benefit from competitive pricing and lower transaction fees due to Stockholm's optimization algorithms.