# Grant Proposal for the Onchain Central Limit Order Book + Perp DEX on Aptos

This document is describing the implementation of a CLOB based Perps. [Aptos](https://aptosfoundation.org/) is the ideal environment for the order book DEX, because of its [performance](https://chainspect.app/chain/aptos), rapid growth, exchange integrations, stablecoin growth and the safety of the move programming language. Being fully onchain, an order book infrastructure for a variety of assets and instrumentsis decentralized and so very attractive from the regulatory prospective.

When we started building V12 on Fuel network, the competition was among the dexes. This year, dexes are starting to compete with centralised exhanges for volume, users and listings. Product success is determined by onboarding institiutional traders and providing them with a CEX-like UX and performance. We're also looking into providing our users with a simple, transparent and easy to use Token Listing kit.

Aptos right now represents a sweet spot to ship Perps , due to the technical maturity+ availability of the right infrastructure and community growth

## Product

V12 consists of 3 core elements: Perp Markets + CLOB + API set

V12 also features a list of high value third party services: Liquidator, Risk Engine, Matching Engine, Trading algorithms, MM Vaults and a Price Oracle. All being parts of the product.

This is how perps that can compete with hyperliquid looks like:

Perps + Spot is a perfect combo, because traders profit in both low and high liquidity markets and hedge perps with spot.

### Perp Markets

V12 Perp Markets represent Clearing House, cross margin, single collateral based architecture, similar to Hyperliquid and Drift, with a double oracle liquidation engine. This system is contract based, txs are finalized in a statelesse/atomic way. Listing new markets in this architecture is very time/effort efficient, and is the best for oracle-based markets.

### Spot

Spot markets are contract based to provide more security to each market. Leveraged trading on the spot is possible if the liquidity in the protocol surpasses a certain Volume+TVL benchmark

### Matching Engine

Matching is happening onchain, post-finalized order data is fetched (via the indexer) via contract ID, and matched via match_order function in the order book contract. We do not store BST onchain to minimize the state and computation costs.

### API

V12 API is based on a TS SDK and fully complies CCXT standard. V12 should be included in the official CCXT docs shortly.

## Tradeoffs

Aptos's native features like massive throughput, finality and block time, are crucial for building a successful product for trading. Volumes can easily be created.

Availability of the infrastructure (Pyth price oracle and Pangea for data indexing), and liquidity + market makers are equally important factors for Derivatives. V12 data indexing will be 250ms faster than current Aptos benchmarks with the infra above.

Let's compare a CLOB on Aptos with the existing solutins on the market:

| Exchange Type | Trustless | Censorship resistance | regulation resistant | capital efficient | Avoids state bloat |
| -------------------------------- | --------- | --------------------- | -------------------- | ----------------- | ------------------ |
| CEX | ❌ | ❌ | ❌ | ✅ | N/A |
| 0x/DyDx/opensea Style Order Book | ✅ | ❌ | ❌ | ✅ | ✅ |
| AMM | ✅ | ✅ | ✅ | ❌ | ❌ |
| CLOB on Aptos | ✅ | ✅ | ✅ | ✅ | ✅ |

We have finalized the first implementation of an [Order Book based Spot and Perps](https://v12.trade/) in Rust, so entire front end/UI design, code base and math are ready. We also have the Liquidity partners and a [vibrant community](https://x.com/v12trade). We keep the Perps repo private but can show after the NDA is signed. We have other products in our [Github](https://github.com/compolabs).

## Grant Milestones

To launch V12 on Aptos Blockchain, we have broken down the development into several steps, outlined below. Mainnet launch is followed by the liquidity bootstrapping phaze.

Step 1. 100,000 USDC to complete the deployment of the CLOB and SDK, set up the indexer and key infra on Aptos testnet, Develop a brand, launch a landing page, social presence, prepare a closed alpha campaign together with Aptos Foundation.

Step 2. 100,000 USDC to implement a closed alpha of the Perps, where users can deposit/withdraw conduct trades on Aptos testnet.

Step 3. 100,000 USDC to add 11 more markets to the Perps, set up the market making algorithms, launch docs and the SDK.

Step 4. 100,000 USDC to ship the public beta of the PERP markets, which shall allow users to create leveraged perp positions. Set up the iquidations and matching engine as
well as provide an API.

Step 5. 60,000 USDC for the full mainnet-ready rollout of the PERP markets, liquidation engine, API, and risk engine.

Step 7. 60,000 USDC to ship the mainnet launch of the SPOT markets.

Each step is followed by the industry-standard marketing campaign.

The product should also be audited by a verified provider, audit grant can be discussed separately.

## Liquidity Bootstrapping

To bring the initial adoption and drive liquidity growth on V12, We will request a token grant from the Aptos Foundation.

Potentially, rewards can be split in 3 seasons with the total token allocation of 45,000 APT.

The goal is always to hit tops on Defillama among the competitors

If we would be doing it today, we would be targetting numbers like 25mln 24 volumes 6 months after the launch

## GTM and Liquidity Strategy

Entire V12 strategy is rolling around building and increasing the liquidity of the markets. We use a Product-centric and have cut all inefficient parts:

- Listings. We can list in minutes, once the price feeds are available. Any asset that started to gain traction can be listed asap.

- KOL campaigns. We're constantly increasing the trading KOL pipeline (vampire attacks on various communities) to drive distribuition and trust.

- MM vaults. We are building the vaults and yield-generating strategies. This is the new standard for onchain market making. Each vault is operated by a trader/firm that runs their own LP campaign, but we are also running a LM mining program

- Community-driven spot listings. We're constantly talking to a the teams that are willing to list their tokens on the Spot.

- Generating mindshare. Our growth team runs campaigns where we onboard, educate and engage the trader community, fueling organic growth as users spread the word about the platform.

- Incentives. There's a bunch of incentivising activities that we're constantly running like trading competitions and reward programs. It's allgamified and transparent - people can see their performance within entire community.

- Airdrops. We constantly drop tokens to the community to drive volumes and bring new users. V12 token will mostly be reserved for the community, we keep 31% of the entire allocation for our users.

- Referrals have proven to be highly effective. We've created a custom referral program that enables users to earn a percentage of the trading volume generated by the people they invite to V12.