Econia 101
A Breakdown of the On-Chain Order Book for Aptos
What is Econia?
Econia is an on-chain order book that runs on the Aptos blockchain. Engineered for high performance, atomic settlement, and built to provide permissionless global access to markets, Econia leverages Aptos’ optimistic concurrency to provide a seamless and efficient trading experience.
Designed to aggregate liquidity from all over the world into a single digital marketplace, Econia is the core back-end system for DeFi, invisible to users unless they are DeFi developers themselves.
Why Aptos?
Aptos’ optimistic concurrency model allows for parallel execution of trades, empowering the blockchain to execute tens of thousands of non-trivial Move transactions per second. By leveraging the preset order of transactions and combining Software Transactional Memory (STM), Aptos easily handles large volumes of transactions at a fraction of a second through its Block-STM execution model.
Econia Labs’ Background
Econia Labs spun out of the 2021 Inaugural Aptos Hackathon, after winning a prize for the hackathon project that eventually became what Econia is today. Following the hackathon, Econia Labs was selected for the initial Aptos accelerator program cohort, then secured $6.5 million in investment for its seed round, led by Dragonfly with participation from Lightspeed Faction, Wintermute Ventures, Hudson River Trading, Flow Traders, Aptos Labs, and others.
The Econia Labs team, with diverse backgrounds from prestigious institutions such as Stanford, Goldman Sachs, NASA, Garmin, and The Block, is focused on developing the premier on-chain order book for the Aptos Blockchain.
Why Econia vs Centralized Exchanges or AMMs
Unlike Automated Market Makers (AMMs), order books offer a trading experience similar to that of traditional venues like Coinbase Pro or Binance, providing users the ability to permissionlessly place trades from their non-custodial wallet. By combining the benefits of CEXs (efficient price discovery and minimal slippage) with the strengths of DEXs (decentralization, permissionless, and user custody of assets), the result is a trading experience that combines efficiency, fairness, and decentralization.
Econia’s matching engine is atomic, meaning that it executes all of the steps required to settle a market order in a single transaction. For example, when a user decides they want to buy or sell a digital asset at the best price offered by the market, Econia matches their order against another market participant’s limit order (an ask or a bid), updates positions on the book, and routes assets between counterparties, all within a single transaction. This single-step transaction would not be possible without the optimistic concurrency of the Aptos blockchain.
How Econia Benefits Traders
Order books are a foundational financial primitive that consolidates liquidity into one global venue, to be shared by all market participants regardless of how they integrate. For Econia in particular, its atomic matching engine reduces computational overhead and leads to faster trade execution.
Econia processes and executes multiple orders in parallel, reducing system overhead to provide a faster and more responsive trading environment. Econia’s ability to process multiple orders simultaneously also means that it can handle a higher volume of trades. Because Econia’s matching engine executes all of the steps required to settle a market order in a single transaction, trades are executed much faster than on traditional DEXs as there is no need to wait for multiple transactions to be confirmed before the trade is considered final.
Overall, Econia’s atomic matching engine makes for a highly efficient experience. Users can trade their assets efficiently without having to worry about delays or unexpected outcomes while simultaneously reducing the risk of MEV attacks.
How Econia Benefits Developers
Building and testing infrastructure can be a daunting task, but Econia’s open-source project has empowered innovative players in the crypto space to build, adapt, and scale. Econia’s hyper-parallelized order book execution and settlement infrastructure provides key partners with a competitive edge in the world of DeFi.
Econia’s APIs and SDKs provide direct access to the Econia protocol, enabling virtually any developer to create, access, and build on top of this innovative infrastructure. Econia Labs is also finalizing an open-source reference frontend, and soon enough anyone will be able to fork it and run their own custom trading dashboard to provide users with even more access to Econia
How Econia Benefits Institutions
Since Econia aggregates liquidity into one global venue, institutions can use it to trade with tight spreads and counterparties from across the retail spectrum on various frontends. Additionally, Econia’s infrastructure is asset agnostic, allowing institutions to trade exotic asset classes like derivatives or options that may not be available in centralized exchanges or traditional markets.
Conclusion
Econia is a hyper-parallelized on-chain order book that runs on the Aptos blockchain and offers several advantages over both centralized exchanges and Automated Market Makers (AMMs). From traders to developers and institutions, key players in the DeFi space can benefit from the liquidity, efficiency, and innovation that Econia provides.
To learn more about the Econia order book, please visit Econia Labs’ developer documentation, found here.
