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LazaiSwap

A custom oracle-based DEX developed by LazaiTrader for predictable trade execution.

Overview​

LazaiSwap is a purpose-built decentralized exchange that uses oracle pricing instead of traditional AMM mechanics.

PropertyValue
TypeOracle-Based
ChainTestnet (Development)
Status🧪 Development
info

LazaiSwap is currently deployed on testnets for development and testing. Production deployment is planned for future releases.

How Oracle-Based DEXs Work​

Traditional AMM Approach​

Price = Pool Ratio
        └── Changes with every trade
        └── Slippage based on trade size
        └── MEV opportunities exist

LazaiSwap Approach​

Price = Oracle Value
        └── Set by trusted price feed
        └── Updated before trades
        └── Predictable execution

Key Features​

Zero Slippage Execution​

Trades execute at the exact oracle price:

AspectAMMLazaiSwap
Expected: $2,500✓✓
Received: ~$2,475PossibleNo
Slippage: ~1%Possible0%

MEV Protection​

No front-running or sandwich attacks:

  • Price determined by oracle, not pool
  • Trade order doesn't affect price
  • Predictable outcomes

Oracle-Updated Pricing​

Before each trade cycle:

  1. Fetch latest market price
  2. Update oracle value
  3. Execute trades at known price

Architecture​

┌─────────────────────────────────────────────────────────────┐
│                    LazaiSwap DEX                             │
├─────────────────────────────────────────────────────────────┤
│                                                             │
│  ┌─────────────────┐      ┌─────────────────┐              │
│  │   Token A Pool  │      │   Token B Pool  │              │
│  │   (e.g., ETH)   │      │   (e.g., USDC)  │              │
│  └─────────────────┘      └─────────────────┘              │
│           │                        │                        │
│           └────────┬───────────────┘                        │
│                    │                                        │
│           ┌────────▼────────┐                              │
│           │  Oracle Prices  │                              │
│           │                 │                              │
│           │  ETH→USDC: 2500 │                              │
│           │  USDC→ETH: 0.0004│                             │
│           └─────────────────┘                              │
│                    │                                        │
│           ┌────────▼────────┐                              │
│           │  swap(token,    │                              │
│           │       amount)   │                              │
│           └─────────────────┘                              │
│                                                             │
└─────────────────────────────────────────────────────────────┘

How Swaps Work​

Price Setting​

Before trades execute:

Oracle Owner calls:
    setPrices(ethToUsdc: 2500, usdcToEth: 0.0004)

Swap Execution​

When you swap:

1. Send 1 ETH to contract
2. Contract calculates: 1 × 2500 = 2500 USDC
3. Contract sends 2500 USDC to you
4. No slippage, exact calculation

Two-Way Pricing​

Separate rates for each direction:

  • ETH → USDC: Sell rate
  • USDC → ETH: Buy rate

Allows for bid-ask spread if desired.

Liquidity Model​

Managed Liquidity​

Unlike AMMs where anyone provides liquidity:

  • Protocol manages token reserves
  • Sufficient liquidity ensured
  • No impermanent loss concerns

Liquidity Check​

Before swaps complete:

require(tokenOut.balanceOf(address(this)) >= amountOut,
        "Insufficient liquidity");

If insufficient liquidity:

  • Swap reverts
  • Your tokens returned
  • No partial fills

Integration with LazaiTrader​

Trade Flow​

1. Trigger Detected
   └── Price moved 10%+

2. Update Oracle
   └── Bot updates DEX prices from market data

3. Execute Swap
   └── SCW calls swap() on LazaiSwap

4. Predictable Result
   └── Exact amount based on oracle price

Price Synchronization​

The bot ensures LazaiSwap prices match market:

  1. Fetch current price from APIs
  2. Update oracle on DEX
  3. Execute trade immediately after

Advantages​

For Traders​

BenefitDescription
Predictable costsKnow exactly what you'll receive
No MEVCan't be front-run
Fair pricingMarket rate from oracle

For Automated Trading​

BenefitDescription
Accurate triggersTrade at the price that triggered
Better PnLNo slippage eating profits
Simpler mathExact calculations possible

Current Status​

Testnet Deployments​

NetworkAddressStatus
Hyperion Testnet0x4704759E4a426b29615e4841B092357460925eFfActive
Zircuit Testnet0x547c2aBf7b604BfB9FfD8fADd678Bc9d449A39cDActive

Production Plans​

LazaiSwap may be deployed to mainnet when:

  • Testing complete
  • Liquidity secured
  • Security audited

Comparison to AMMs​

FeatureLazaiSwapHerculesDEX
Price sourceOraclePool ratio
SlippageZeroVariable
MEV riskNonePossible
LiquidityProtocolCommunity
Best forPredictabilityDeep liquidity

Security Considerations​

Oracle Trust​

LazaiSwap relies on accurate oracle prices:

  • Only trusted operators can update
  • Prices verified against multiple sources
  • Updates timestamped

Smart Contract Security​

Contract features:

  • ReentrancyGuard protection
  • SafeERC20 for token transfers
  • Owner-only price setting
  • Explicit token validation

FAQs​

When will LazaiSwap be on mainnet?​

LazaiSwap is currently in development on testnets. Mainnet deployment timeline will be announced in our roadmap updates.

Can I provide liquidity to LazaiSwap?​

Currently, liquidity is protocol-managed. Community liquidity provisions may be enabled in future versions.

What if the oracle price is wrong?​

Multiple safeguards:

  • Prices from multiple sources
  • Deviation checks
  • Regular updates

Further Reading​