Understanding the Spot Market

The Spot Market is an on-chain DEX, that allows the creation of Perpetual Market Orders (PMOs) and Limit Orders (LOs).

PMOs and LOs are basically trades that order creators propose to the market under certain conditions. Once an order has been opened, everyone can execute it (i.e. accept the transaction that is proposed) in a permissionless manner, if the requirements are satisfied.

Unlike regular AMMs, Tangent does not rely on liquidity pools to settle trades. Instead, its functioning can be considered as an on-chain orderbook, where anyone can propose a trade to the market.

The system allows users to propose trades to the market between any assets listed on the platform, by using an Oracle-based Pricing Engine that offers efficient pricing and exotic routing. Such a method also allows the creation of trades where one asset can be exchanged for a variety of other assets, and not just one.

For exemple, Tangent enables the creation of the following orders (or trades):

• Exchange wBTC vs ETH, at market price (PMO);

• Exchange DAI vs wBTC at market price, only if wBTC is worth less than $25,000 (LO);

• Exchange CRV vs CVX, FXS or FRAX at market price, only if CRV price is in the $0.5 - $0.55 range (LO).

A Perpetual Market Order will be available on the market as soon as it is created, while a Limit Order will be available only when the price requirements will be reflected by the market.

Once an order is opened, it will be partially (or fully) executed each time a buyer shows up. Orders remain opened until their are fully fulfilled, or for a fixed duration.

In order to incentivize order executions, the Tangent's Pricing Engine uses a combinaison of Curve LPs on-chain Oracles, and uses the lag between them to artificially generate an arbitrage opportunity. In other words, orders will most likely get executed by arbitragers, as doing so may result in an immediate profit.