<center> Station Technical Documentation </center>

# <center> Station Technical Documentation </center> --- ## <center> Overview </center> --- Station is the first on-chain aggregation protocol for defi derivatives, currently being developed in 2 phases: **Station** ***V1***, is the initial launch of the Station dapp, operating solely on the Ethereum Blockchain as a Put/Call options aggregator. Station ***V2***, will expand the aggregation of the ***V1*** protocol from the aggregation of options on Ethereum, to a cross-chain aggregator for all derivatives using THORChain’s revolutionary protocol for cross-chain native token swaps. This paper will only contain a light overview of our plans for ***V2***, as this is necessary in order to protect our intellectual property during development and to assure that we meet our goal of being first to market with a cross-chain derivatives aggregator. --- ## <center> Introduction </center> --- The recent explosion of interest in platforms offering derivatives, mainly call/put options, has exposed multiple 'pain points' felt by users and sellers alike. Most of these issues are the result of a fragmented marketplace, created by the natural partition between platforms seen in many blockchain technologies. This has led to an absence of competition in price, quality, and innovation on a scale certain to impair the long term growth of the entire defi industry. The learning curve for new blockchain users to interact with on-chain applications has created a stagnant marketplace, where users opt for convenience and familiarity over the hassle of comparing prices and features from different providers. The solution to this problem is clear: take the users from each individual platform, put them together in one place, and give them access to derivatives from as many platforms as possible. To accomplish this, the Station protocol will initially launch on the Ethereum Mainnet as "Station ***V1***". The ***V1*** protocol will aggregate only call/put options from Ethereum option platforms to serve as a proof of concept by enabling ***the invisible hand of the market*** to create efficiency in a sector that demands it to achieve long term stability and success. --- ## <center>Platform Overview</center> ___ "*Defi Derivatives Aggregator*" as a description of the Station platform has the potential to include a wide array of different products, and the long term vision we have for our platform is to do just that. However, we have seen countless projects overextend early and collapse as a result. Keeping a new project simple and focused at launch is vital to support long term stability. This influenced our decision to focus on 3 key services at launch referred to as the '***Core Protocols***': 1. Decentralized Put/Call Option Aggregator 2. Smart Order Routing (SOR) 3. Cross-Asset Payment Pools (CAPP) These products will serve as the foundation for developing the innovations necessary to accommodate a rapidly expanding industry for years to come. The documentation from this point forward will focus on an in depth technical analysis of the Station ***V1*** *Core Protocols*, and our vision for the future of decentralized derivatives. --- ## <center>Decentralized Option Aggregator</center> --- ### <center><ins>Overview</ins></center> The Decentralized Option Aggregator is the main service available on the Station platform, it allows users to compare pricing and make purchases from a wide array of on-chain option platforms. This area of the protocol has been designed with a focus on simplicity, speed, and convenience for users. Using our aggregator is similar to using many of the aggregation platforms that users already interact with on a daily basis, users can specify the parameters of the options they wish to compare(Underlying Asset, Put/Call, Strike, Expiry, and other features). After this, the user submits their request, and 10 closely matching options are returned shortly after for comparison. The user is then free to purchase the option(s) that best fit in their portfolio, directly from the Station App, using any of the 10 token major payment tokens that are currently integrated in our ***Cross Asset Payment Pool(CAPP)***, which will be elaborated upon in the **CAPP** section. ### <center><ins>Technical Information</ins></center> Connecting directly to each integrated option platform’s smart contract through web3, Station users experience quick, secure and convenient option purchasing. Station ***V1*** routes the user directly to the selling platform if the user is paying with a token that is accepted natively as payment by that platform, charging a small fee for the aggregation service. On the other hand, if the user is paying with a token that is not accepted natively as payment by the platform, the payment is instead routed through our ***Cross Asset Payment Pool***, and the Station App acts on behalf of the user, purchasing their option with the token required for payment and immediately delivering custody directly to the user's wallet. While this may seem a bit complicated, it's important to point out that from the user's perspective, everything was done with a simple touch of a button, and signing the initial transaction in the user's wallet app. --- ## <center>Smart Order Routing(SOR)</center> --- ### <center><ins>Overview</ins></center> Smart Order Routing(SOR) is the automated process of order handling, and has become a powerful tool in the defi space. SOR has cemented itself as the standard in price efficient token swaps, the Station platform introduces a new use case for SOR by applying it to non token based assets for the first time. This innovation of SOR does more than just create efficiency, it solves a real and significant issue that has plagued options platforms for years, most platforms that sell derivatives do not have collateral available to fill large institutional orders. Station will solve this problem by utilizing SOR to fill large orders across multiple platforms and chains, spreading the collateral between each. This service will allow large financial institutions to inject capital into the decentralized derivatives marketplace at much higher levels than what is being seen today. ### <center><ins>Technical Information</ins></center> Station SOR in application works very similarly to the DOA, the user/institution selects their desired asset, their allowance and derivative type, then through the SOR completely fill the allowance when possible, prioritizing price and filling the order from the bottom up. It then returns the results of the query, including how closely it was able to fill the parameters. Upon obtaining user confirmation and payment is made the SOR proceeds to fulfill the order. --- ## <center>Cross-Asset Payment Pool(CAPP)</center> --- ### <center><ins>Overview</ins></center> The Cross-Asset Payment Pool(CAPP) is a Station innovation to the way payments are made for on-chain goods and services. CAPP allows users to purchase options through our aggregator with any supported token, even if the platform selling the option doesn't accept that token as payment. The CAPP accomplishes this feat by holding liquidity in 8-16 of the leading payment tokens on THORChain, which are used to make payment on behalf of the user and adding their payment to the pool's liquidity. The only restriction to this payment system is that the user's token and the token accepted by the option seller must be supported by the CAPP and have sufficient liquidity. ### <center><ins>Technical Information</ins></center> The StationV1 CAPP requires sufficient liquidity of each supported token at all times to ensure reliable functionality for users. Thus, in contract to a conventional AMM, the CAPP does not balance swap rate via a bonded curve, rates are instead fetched using Band Protocol price oracles which allows us to focus balancing efforts on the liquidity of each token available in the pool. This is done by using a novel algorithm to set the adjustable fee rate for eachswap taking into consideration the health of liquidity for both the token swapped in and the token swapped out after the swap would be executed. Simply put, if you swap in a token that is already or creates oversaturation and swap out a token that is or would create undersaturation for those tokens liquidity relative to the liquidity of all tokens in the pool, that would be considered unhealthy for the overal balance of liquidity, and would result in a higher fee to execute. This serves to both decentivize unhealthy activity and to entice liquidity providers correct these imbalances by using the higher fee paid for unhealthy swaps to pay much larger than average rewards to LPs willing to restore balance. The same is true for the visa versa, users making swaps that contribute positively to the liquidity balance restoring health for the pool, will be charge a much lower than average fee for the swap. The rewards for LPs will also be lower for providing liquidity to already balanced tokens, thus decineivizing over , which is funded directly in correlation to to the lower fees charged to users for creating balance. ---