Bonfida Delivers A New “Core” for Serum — Asset Agnostic Orderbook — Serum Stories #11
I discovered Solana at the same time as I discovered Serum, and for me, the value propositions of both were clear: bring the off-chain trading experience on-chain.
Welcome to Serum Stories #11
A single year is an epoch for crypto. Readers may remember the landscape in September of 2020: Serum emerged alongside a number of primitives with incredible ambition and plans to bootstrap an entire ecosystem. Among those primitives included Bonfida, the flagship Serum GUI and full product suite bridging the gap between Serum, Solana, and the user.
This week, we are joined by the Bonfida team. Bonfida is rightly known for its highly intuitive GUI and diverse feature offerings for traders of all levels of experience. We’re delighted to have them on to hear more about their origins, their roadmap, and one of their most exciting innovations as of yet: a new critical component for Serum that opens up entire worlds for Serum and Solana developers.
What’s up next
1. — What is Bonfida?
2. — Why Serum?
3. — Asset-Agnostic Orderbook (AOB)
4. — Bonfida Bots!
5. — Teaser
6. — Decentralized buy and burn
7. — Solana Name Service
8. — Final words
Interview
1. For those who are not already in the know, what is your 30 second elevator pitch for Bonfida? What’s your usual introduction to new investors or players?
Bonfida is the flagship Serum GUI and full product suite bridging the gap between Serum, Solana, and the user through its highly intuitive trading interface, Solana data analytics, and sophisticated ancillary features. On top of offering a user-friendly DEX UI, Bonfida features advanced on-chain order types, exclusive markets, and listings, and two trading modes for users of different experience.
2. Bonfida is one of the very first projects, if not the first, within the Serum ecosystem.
Why did your team choose to build within the Serum ecosystem? What did you envision at that moment of time, and how did this lead to your parade of innovative features?
I discovered Solana at the same time as I discovered Serum, and for me, the value propositions of both were clear: bring the off-chain trading experience on-chain.
Solana is the only blockchain that is fast enough for this, and Serum was the first project to develop an on-chain CLOB. So it was pretty clear that this would enable much more powerful DeFi protocols, and this is how I started falling down the rabbit hole.
3. Your team has certainly put out a lot in just one year! Though Serum has only been around for a year now too.
Your newest innovation is this asset-agnostic orderbook (AOB). In layman terms, what is the AOB? What does it mean for Serum, for SRM and FIDA holders, for developers, and everyone else in the ecosystem?
As the Solana DeFi ecosystem continues to grow, many projects invest a lot of time into designing a bespoke market implementation instead of leveraging the capabilities offered by the Serum orderbook. We believe that this is mostly due to the fact that Serum is over-specialized on spl-token assets. This is why the natural next step for Serum is to become asset agnostic.
Some assets cannot be tokenized but can still benefit from an orderbook (OB): implementing a perpetual futures exchange on a Serum orderbook implicitly requires positions to be tokenized with a common mint for each market pair. This is impossible, because a perpetual future position is inherently multi-dimensional: a position is described by its size, its entry price, and the collateral it contains. This means that a position isn’t a multiple of a smaller position element, in the same way that an spl-token asset is.
Due to the constraints of the Solana runtime, Serum has had to implement an event queue to create a buffer between the difficult to predict and non-sequential matching engine and writing back into open order accounts. In an asset-agnostic orderbook, Serum’s event queue is the output, and programs which are built on top of Serum have exclusive access to their associated market’s event consumption crank. This means that these programs can themselves be cranked, read into the event queue, pop the processed element from the queue, and then use the resulting matching information to create and enforce complex contracts between the matched parties
In practice that means creating a new Serum primitive: Serum Core.
Serum Core is the asset agnostic orderbook described above. This primitive can be used by any Solana smart contract looking to use an orderbook without having to worry about re-implementing all its logic and managing cranking (which can end up being costly).
It basically offers a matching engine as a service, to which other protocols can subscribe by consuming its events.
With the AOB, Serum becomes a truly universal component usable by any protocol, derivative, spot or anything else. Devs can use it to match anything — even NFTs or non-fungible stuff or domain names or whatever. Perps are a great example, and the AOB means that builders no longer have to try and represent complex positions via SPL tokens.
In other words, other protocols, like Audaces, or a Zeta or Mango Markets, can focus only on the risk engine, the margin engine, and outsource all the matching to Serum.
4. Bonfida, of course, is known for many other specialties! Let’s talk about Bonfida Bots and automated trading strategies.
Bonfida Bots is a smart contract that allows users to tokenize their trading strategies and do copy trading. A bot is simply a basket of tokens controlled by a smart contract that follows the strategy provided by a signal provider. Anyone can create a bot and participate in bots made by others.
Probably one of the most exciting features of Bonfida Bots is the ability to plug bots directly into TradingView using TradingView alerts. This means that any TradingView strategy can be executed directly on Serum in a trustless way.
But Bonfida bots can have broader applications. One thing that might be frustrating with Serum and DEXs in general is the lack of complex order types, and in particular, stop losses and take profits.
The main reason why DEXs don’t offer them is because you don’t want your stop losses and take profits to be fully visible on-chain, as this could give information about your position to other market participants.
One way to solve this problem is to have a small off-chain program constantly checking the price of the asset and send an on-chain transaction when certain conditions are met. For instance, for a take profit, it would be a sell order transaction if BTC price gets above a certain threshold.
Sounds like automating a trading strategy? Well it actually is, and this is where Bonfida Bots and TradingView kick in!
5. If we understand this correctly, this is a chance for users to grab interesting strategies from TradingView and plug and play! What’s the step-by-step? Anything new coming to Bonfida Bots in the future?
We are planning to integrate more trading protocols that are live on Solana and that would benefit from automation. Stay tuned.
6. Very coy, but we’ll be patient. In the meanwhile, tell us more about FIDA’s buy and burn: DeFi enthusiasts find this decentralized process endlessly interesting. How does it work?
FIDA buy and burn was designed decentralized and permissionless. All the protocol fees go into a smart contract that can only do two things: buy FIDA on FIDA/USDC Serum market and burn the FIDA it bought.
These two instructions are permissionless, which means anyone can trigger these instructions and make the buy and burn happen. Each month, 10% of the FIDA burned throughout the month is airdropped on on-chain stakers. FIDA stakers have the possibility to maximize the amount airdropped by using the USDC contained in the pool to buy FIDA and burn it.
You can give it a try here https://burn.bonfida.org/. Just connect your wallet to send USDC order to Serum, and then when they try to settle, it goes back to the FIDA pool and burns the FIDA in the pool, with 10% going to stakers.
7. What about the Solana Name Service? This captured a lot of attention across Crypto Twitter too on launch.
The mission of the Solana name service is to provide a decentralized and affordable way to map domain names (.sol) to on-chain data. This on-chain data could be anything from a SOL address to IPFS CID, images, text, and what have you.
One of the clear benefits of the name service is to have a human readable name that can map to a SOL address. Why does it matter? Because SOL address formats are a barrier to adoption, and having a human readable address facilitates payments by allowing people to exchange assets by simply sharing a name (e.g. bonfida.sol).
But Solana domain names can have much broader applications than just payments. For instance, the data stored on-chain could be an IPFS CID (i.e the unique identifier of a website hosted on the IPFS network).
Most dApps have a single point of failure which is the centralized and censorable domain name. However, on-chain domain names cannot be censored or taken away. Therefore a website hosted on IPFS (or Arweave), and using a Solana domain name would be completely decentralized and very difficult to censor.
On top of the .sol domains we also offer the possibility to register Twitter handles on Solana. So not only you can use a .sol domain but you can also use your Twitter handles to send and receive payments.
One other application we are exploring based on the name service is web authentication using a web3 wallet. This is something that has been barely explored by the crypto industry but we think it can have very powerful applications.
8. Any final words to the Bonfida supporters?
We have a lot of ideas, we want to keep iterating on these; the AOB will allow us to build more protocols that would benefit from a CLOB!
We hope you enjoyed the interview!
We would love to continue having these kinds of conversations with all the incredible teams building on Serum and sharing them with you. Just let us know who you want to read about next!
You can keep up with the Bonfida team and development through their Twitter, Medium, Discord, and of course, their website.
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