Frequently Asked Questions
Deepwaters operates in a totally unique way, using a combination of blockchain (decentralized) and cutting-edge hardware-protected execution (centralized), along with external validation to guarantee that no one, not even the platform itself, has an information or functional advantage over any other.
Our order-flow is managed completely off-chain, so all you need to do is sign the message to initiate an order.
All trades on Deepwaters are encrypted on our hardware layer and private (even from us!) until they reach the order book. This removes any ability to create adverse selection due to informational asymmetry. We also utilize off-chain pricing which eliminates price discovery from a sequential order of transactions.
Deepwaters extends the benefits of self custody by combining the use of smart contracts with confidential computing. Through use of existing blockchain public-key encryption infrastructure and nodes deployed into secure enclaves, users can safely deposit and withdraw assets into ‘vaults’ and execute financial transactions. These actions are strictly initiated by the user or a system(s) they have given permission to act on their behalf.
Our matching engine operates off-chain and performs multiple functions in the process of settling trades. Taking this function off-chain allows us to completely eliminate gas fees and any possibility of front-running/MEV.
All RFQ trades are priced using oracles: when a user provides a token quantity in our trading interface, a quote is generated by taking a weighted average of current prices on Binance, Coinbase, and FTX (others will be added in the future).
We charge 0.1% for maker orders and 0.15% for taker orders.
DEX aggregators route orders to whichever exchange is offering the best quote, most of which use an invariant model for price discovery. Due to the limitations of this design, orders will still experience price slippage relative to the order size. In many cases trades are also broadcasted publicly on-chain prior to execution, allowing for MEV/front-running attacks to take place.
Price discovery on centralized exchanges is susceptible to “toxic order flow” attacks, resulting in the unfavorable price movements trickling down to the uninformed retail trader. Deepwaters aims to eliminate this attack vector. In addition our self-custody design guarantees your funds are safe regardless of what happens to the protocol.
RFQ exchanges that utilize off-chain market makers are substituting on-chain MEV for loss of fairness and efficiency by giving those market makers control over the price.