Flowmatic: Algorithmic Trading and Speculating dApp Using Dexterity
The problem Flowmatic intends to tackle is that of liquidity structuring in most DeFi swaps and AMMs. The status quo for funding a strategy involves interacting with AMM, as enabled by LPs. There is a level of liquidity granularity and structuring missing in this approach, thus greatly limiting the range of possible investable strategies.
Flowmatic is a dApp designed to provide traders with the ability to structure liquidity in new and versatile ways (algorithmically), while allowing investors to discover and support these strategies.
An algorithmic trader builds a market making bot that deploys bids and asks around a spread. Maybe there is an Avellaneda Stoikov twist to this strategy and maybe the spread changes based on various volatility considerations.
Assuming the parameters and logic make sense, an investor may want to invest and scale up the strategy. The participants would share in the PNL, increase liquidity, and grow the HXRO network.
Flowmatic intends to target somewhat sophisticated retail and institutional participants, providing them with a low-to-high code method for speculating based on preferences.
Core functionality of Flowmatic MVP:
1.1 Strategy Pool Management
Flowmatic will provide a way to manage pools/ vaults of investor funds allocated to different algorithmic trading strategies and liquidity deployment methods. This will include:
a. Creating and managing strategy pools that hold investor funds.
b. Assigning permissions and access levels for each strategy pool.
c. Monitoring the strategy pools to ensure security and risk compliance.
1.2 Algorithmic Trade Executor
Flowmatic will integrate with the Dexterity tooling to execute algorithmic trading strategies and liquidity deployment. This will involve:
a. Interfacing with Dexterity’s Market Product Groups and Trader Risk Groups functionality to deploy liquidity.
b. Supporting various types of Flowmatic and user-generated trading strategies, such as arbitrage, market-making, trend-following, and/ or delta neutral approaches.
c. Implementing risk management by integrating with Dexterity’s Risk Engine, ensuring that strategies adhere to risk limits and margin requirements.
1.3 Investment/ Speculation View
Flowmatic will offer an investment (speculation) view that allows investors to view and allocate towards algorithmic trading strategies and liquidity deployment methods. This will include:
a. Allowing investors to allocate funds to specific strategies based on their preferences and risk tolerance.
b. Implementing smart contracts to manage investment funds, ensuring transparency and security.
1.4 Interactions between Components
Flowmatic’s components will interact with each other and the Dexterity system through APIs and smart contracts. For example:
a. The Algorithmic Trading Executor will use Dexterity to place and manage orders.
b. The Investment Portal will utilize smart contracts to manage investments and distribute returns.
2.HXRO Token Integration and Incentives
Flowmatic plans to incorporate the HXRO token to enhance utility and align user incentives through:
2.1 Utility and Incentives
a. Staking and Fee Discounts: Flowmatic plans to allow users to stake HXRO tokens to earn a share of the platform’s fees and receive fee discounts on the platform. This encourages platform participation and growth.
b. Rewards: Users can obtain token rewards for creating successful strategies or supporting profitable ones, incentivizing active contributions to the platform.
2.2 Tokenized Strategies
a. Strategy Tokenization: As a future consideration, Flowmatic may enable the creation of tokenized versions of trading strategies, with HXRO tokens used as the underlying collateral.
b. Trading Tokenized Strategies: This approach allows investors to easily invest in and trade various strategies, similar to how they would trade other tokens, further enhancing the HXRO token’s utility within the ecosystem.
We are seeking a grant of $25,000 USDC to aid development costs and an additional 100,000 $HXRO tokens to seed pools/ vaults and strategies, and to be utilized as incentives for users on the HXRO network.
We welcome any feedback/ discussion