eerc20 Batch Auction DEX

A privacy-focused decentralized exchange for Avalanche's eerc20 token standard, implementing a batch auction model to preserve confidentiality while enabling efficient trading.

Overview

This DEX is specifically designed for the eerc20 token standard, which uses zero-knowledge proofs and homomorphic encryption to keep balances and transaction amounts private. The batch auction model was chosen as the optimal trading mechanism because it:

• Preserves privacy by aggregating multiple trades together
• Provides efficient price discovery without revealing individual positions
• Reduces MEV and front-running vulnerabilities
• Enables gas-efficient verification of multiple zero-knowledge proofs

Features

• Private Trading: Trade eerc20 tokens without revealing your balance or trade amounts
• Batch Auctions: Trades are collected and matched in batches at a uniform clearing price
• Zero-Knowledge Verification: All transactions are verified using ZK proofs
• Regulatory Compliance: Integration with eerc20's auditability module
• Multi-Token Support: Support for both standalone eerc20 tokens and eerc20-wrapped ERC20 tokens
• Browser Compatibility: Full support for browser environments with safe parameter handling
• Graceful Error Handling: Returns empty results instead of throwing errors for improved resilience

Project Structure

├── contracts/             # Smart contracts
│   ├── core/              # Core DEX functionality
│   ├── interfaces/        # Contract interfaces
│   └── utils/             # Utility contracts
├── scripts/               # Deployment scripts
├── test/                  # Test scripts
│   ├── unit/              # Unit tests
│   └── integration/       # Integration tests
└── src/                   # Frontend source code
    ├── components/        # React components
    └── utils/             # Frontend utilities

Getting Started

Prerequisites

• Node.js >= v16.x
• Npm or Yarn
• Go >= 1.23.x (for ZK proof generation/verification)

Installation

1. Clone the repository:

git clone <repository-url>
cd eerc20-batch-dex

2. Install dependencies:

npm install

3. Create a .env file based on .env.example:

cp .env.example .env
# Edit .env with your configuration

4. Compile the contracts:

npx hardhat compile

Local Development

Start a local Hardhat node:

npx hardhat node

In a separate terminal, deploy the contracts to the local network:

npx hardhat run scripts/deploy.js --network localhost

Deploying to Avalanche

To deploy to Avalanche Fuji Testnet:

npx hardhat run scripts/deploy.js --network fuji

To deploy to Avalanche C-Chain Mainnet:

npx hardhat run scripts/deploy.js --network avalanche

How It Works

Batch Auction Process

1. Order Collection Phase: Users submit buy/sell orders with encrypted amounts and public limit prices during a fixed time window (e.g., 5 minutes)
2. Batch Settlement: At the end of each time window, a uniform clearing price is determined
3. Zero-Knowledge Execution: Orders are matched and settled using ZK proofs to maintain privacy
4. Batch Finalization: The results are recorded on-chain, starting the next batch auction

Privacy Preservation

The DEX preserves privacy through:

• Encrypted order amounts using eerc20's homomorphic encryption
• Zero-knowledge proofs for trade validation
• Batch execution to hide individual trade details
• Private state transitions while maintaining verifiable integrity

Extending the DEX

The DEX can be extended with:

• Additional token pairs
• Enhanced ZK proof systems
• Improved order matching algorithms
• Custom frontend implementations

License

This project is licensed under the MIT License - see the LICENSE file for details.