SPEEDEX: A Scalable, Parallelizable, and Economically Efficient Digital EXchange
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SPEEDEX is a decentralized exchange (DEX) letting participants securely trade assets without giving any single party undue control over the market. SPEEDEX offers several advantages over prior DEXes. It achieves high throughput – over 100,000 transactions per second on 32-core servers, even with 70M open offers. It eliminates internal arbitrage opportunities, so that a direct trade from asset A to B always receives as good a price as trading through some third asset such as USD. Finally, it prevents frontrunning attacks that would otherwise increase the effective bid-ask spread for small traders. SPEEDEX's key design insight is to use an Arrow-Debreu exchange market structure that fixes the valuation of assets for all trades in a given block of transactions. Not only does this market structure provide fairness across trades, it makes trade operations commutative and hence efficiently parallelizable.
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