DLUX Node and DEX Transaction in gory technical detail

[disregardfiat]

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Walking through how DLUX DEX provides new features and less fees for layer 2 solutions on HIVE

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Comments

[borislavzlatanov]

Great, thanks for the explanation!

Let me see if I get the gist of how the network works. All the DLUX network data (token balances, etc.) is stored as a state file. Each node hosts a copy of the latest version of this state file and makes the file accessible through the IPFS network. When a user makes an operation, the frontend would allow writing to Hive (custom json) and to the DLUX state file. The DLUX nodes then (I guess) verify that the Hive operation was successfully completed on Hive, and also verify that the transaction is valid as per the DLUX network rules. If so, they update the state file to include the new operation. The nodes also of course allow all performing all sorts of operations (loans, etc.) that aren't possible on Hive alone. Is that more or less accurate?

Got a question. How are node operators compensated for running a server and keeping the network integrity? One thing I'm wondering about is the susceptibility of the network to collusion between node operators - say if a given token's price increases a lot and there aren't that many nodes, the node operators may find it more profitable to collude, distribute the token balances among themselves and quickly sell it on exchanges. How does the network defend against this, considering that there would likely be highly volatile tokens with low total supply on it?

[disregardfiat]

Bingo! I think the only thing is... the nodes verify all aspects of every transaction because a front-end allowing certain transactions is only a matter of convenience and not security.

The operators may be paid thru inflation or with Hive transfer fees. Collusion is a very real problem and it prevents a HIVE multi-sig wallet for instance from carrying a substantial amount. The system is Proof of Stake, and attacks can come from both holding transactions hostage and stealing outright. So a multi-sig wallet with a 13/25 weight could only hold as much as the lowest 13 signatories collectively have in collateral. The rest would likely go directly to layer 2 token purchase to keep the price of the layer 2 token high.

To keep transactions on the DEX working only properly collateralized trades may be placed, and only properly collateralized trades will be kept live. Additionally, only trades with-in 1% of the current best price may be purchased to prevent wash trading the moving average up or down and cutting out certain parties.

[foxon]

I like how this is shaping up and will be keeping an eye out for ways to participate. Might fire up a dlux node tonight to check it out

@fbslo , have you had a look at this project? I'd be interested in your thoughts

[fbslo]

Very interesting, I'll check out the code.

[fabpoleo24]

Thanks for info @disregardfiat

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