We recently introduced our hDEX (Hybrid-Decentralized Exchange) Architecture. If you have not read that yet, click here!
When Tacen originally set out to design cross-chain hDEX architecture, we analyzed many potential solutions to cross-chain settlement. From interoperability layers like Cosmos to pure oracle-based solutions, we surveyed the landscape before deciding on what is now the current hDEX architecture and utilizes DFINITY's Internet Computer [IC] as one of the oracle's immutable data storage layers.
It’s important to first understand that the design around Tacen's hDEX architecture is designed to be blockchain agnostic. Settlement Data Oracles (SDOs) are used to track trades between various blockchains and reach consensus on the state of obligations between traders. These SDOs are a key component of the TXA Decentralized Settlement Layer.
However, we are faced with an architectural problem here, namely that of reliable and consistent transaction data storage. If SDOs store data individually, then there may arise data consistency issues between each other. As such, we knew that an hDEX architecture was going to require a high-performance, shared, immutable, and persistent data store to record the trades for audit purposes. A blockchain serves as a perfect solution for this because we only use it for data storage and not to actually run the hDEX.
Three Redundant Data Storage Solutions
We chose three redundant systems for the TXA Decentralized Settlement Layer’s data storage under our current design. The first is a buffered, local cache on the SDO itself to handle high volumes of incoming data. Then, data is compressed and simultaneously written to DFINITY's Internet Computer as well as Hedera’s fair-ordered message queue, which is a fallback data logging source.
It’s much less likely that the SDOs will have data consistency issues by using a shared data source, which is of vital importance because our current design requires that SDOs must reach a 2/3 super-majority consensus on the data obligations within their quorums (the minimum of which is 10).
Imagining the TXA Ecosystem
Stepping back and imagining the scale that TXA's ecosystem can reach when it's fully operational can be awe-inspiring. Imagine a global network of thousands of SDOs handling hundreds of settlements happening in parallel. Trades are broadcast and captured by the SDOs and then are compressed and written to the Internet Computer consuming cycles, which brings yet another strong use case for DFINITY.
The long term vision is that the TXA Decentralized Settlement Layer will support numerous exchange platforms. From NFT exchanges to digital assets exchange platforms - such as Tacen's future US-based flagship hDEX and regional exchange platforms, TXA's tech is built to offer the opportunity of a blockchain agnostic hDEX that utilizes the Internet Computer for data storage while also keeping privacy, security, and fund custody as top priorities.
Don't forget to join Tacen's Telegram! You can also find TXA's Telegram here. We are going to continue to roll out explanations of important aspects of our hDEX architecture. Our next topics will include both the process of how a trade is done on an hDEX and how Tacen is planning to utilize TXA's Decentralized Settlement Layer to handle trade settlement. However, we want to know what questions you may have about the hDEX that we are building or what our relationship with DFINITY will be, so head on over to our Telegram and let us know!