
Decentralized Clearing Network: A Protocol for Hybrid Decentralized Exchanges - patricklorio
https://merklex.io/blog/decentralized-clearing-network/
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askmike
Cool stuff, I have a few questions:

\- Is DCN a smart contract where centralized exchanges push settlement groups
to (say once every x minutes)? This would indeed allow for fast offchain
matching while settling onchain. However the CEX needs to feed in all
signatures from all traders, resulting in a big bloat nonetheless (ETH
blockchain is over 1TB right now).

\- This would require users to lock funds not just in the DCN, but tell the
DCN at what specific exchanges these funds can be spent. If not a user can
give 2 exchanges the same signature (to the same funds locked in DCN) and
trade the same funds twice.

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patricklorio
Good questions.

"Is DCN a smart contract where centralized exchanges push settlement groups to
(say once every x minutes)?"

Yes, currently merkleX pushes settlement groups after the matches reach an age
of 1 hour. So in practice, about one every hour for each market.

"However the CEX needs to feed in all signatures from all traders, resulting
in a big bloat nonetheless (ETH blockchain is over 1TB right now)."

Ideally the amount of signatures a user provides will be much less then the
amount they trade. For example you could set a limit preventing buys of
Ethereum over 200 and sells under 100. That limit on trading could over
trading for a week. It's a balance between trust of the exchange and load on
the network. The power comes from giving the user the choice.

"This would require users to lock funds not just in the DCN, but tell the DCN
at what specific exchanges these funds can be spent. If not a user can give 2
exchanges the same signature (to the same funds locked in DCN) and trade the
same funds twice."

Yeah, good find. That's a current limitation and does make it harder to move
between exchanges on the DCN.

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askmike
Thanks for your answers. I've subscribed for more news.

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wheelerwj
Its a step in the right direction. I love to see crypto being used to solve
these problems. But unfortunately its one very small step in what needs to be
giant leaps.

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patricklorio
The DCN is currently powering
[https://merklex.io/trade](https://merklex.io/trade). Happy to answer any
questions.

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motolov
FYI DCN is mentioned but in the header you state DNC

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patricklorio
Good catch, thank you. Will update.

