Introducing Aqueduct — tools for liquidity sharing and automated trading

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Dear Community,

We are pleased to introduce Aqueduct — a suite of developer tools for sharing liquidity and building automated trading applications. In this post we’ll explain our vision for Aqueduct and the future of decentralized trading networks for the 0x ecosystem. We’ll also explain how algorithmic traders and institutions can access this network and easily integrate with the suite of developer tools we designed specifically to allow for a first-in-class developer experience.

Shared Liquidity Network

At ERC dEX, we are pioneering the implementation of shared liquidity by aggregating and maintaining orders from affiliate 0x relayers who also host an open order book.

Let’s briefly go over what an open order book is and consider the benefits…

An open order book in this context refers to the implementation style of the 0x protocol, specifically.

In short, any relayer implementing an open order book can have orders created on their books, and allow any other relayer with an open order book to pull in the orders and offer them up to their users. The orders are filled using a shared order filling protocol, creating a seamless and undetectable experience for relay users.

An alternative to the open order book is the closed order book, or the matching implementation of the 0x protocol, which refers to an order matching strategy where the relayer acts as the taker on both sides of the trade. This means that the relayer matches the trades centrally before distributing the funds.

Relayers implementing an open order book need not be party to the transaction — thus, offering a more “trustless” experience.

In this initial release of Aqueduct, we implement the standard relayer API developed by the 0x team, as well as an added layer of APIs developed in-house that allow for granular access to trade history, order data and related events. We’ve developed these tools to offer a better user experience and grow the global liquidity network, so we encourage relayers and dApps to use Aqueduct to access not only the ERC dEX order book, but also the orders of all of our connected partners.

Our grander vision for the future, however, is to incentivize order sharing among all affiliate relayers. Thus, we’re developing a first iteration fee-sharing solution that can be easily implemented by partners. This fee-sharing mechanism will incentivize affiliates to cooperate to make networked liquidity a reality and offer a better user experience in the form of deeper liquidity pools.

This same mechanism allows us to provide large liquidity providers incentives for adding liquidity to the network, so market makers and traders moving large volumes can enjoy discounts in the form of rebates.

If you’re interested in becoming an affiliate liquidity provider or relayer and we haven’t talked with you already, we’d love for you to get in touch.

Automated Trading Developer Toolkit

Our vision for liquidity sharing is important for sophisticated algorithmic traders and developers for three reasons:

1. You can access all orders in one place — as we aggregate order books from affiliate relayers and prune and maintain one book;
2. If you’re making a market, we syndicate orders through Aqueduct as well, so the orders you make on ERC dEX can become syndicated to all of our liquidity partners, and
3. Our developer toolkits and starter project will help you get setup in minutes.

The Aqueduct suite of products provides developers with APIs and an SDK to power a range of applications and use cases. There are three main products:

1. The Standard REST API for accessing the shared liquidity order book, historical data, notifications, and more.
2. The WebSocket API is used to notify subscribers in real-time of important order changes, taker events, price changes, and other notifications.
3. The JavaScript SDK wraps the APIs for seamless integration into your JavaScript/TypeScript application.

For more information about developing with Aqueduct, check out our documentation. We also offer tech support to algorithmic traders and firms. Let us know if you’re interested!