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Overview

PaxSpot is a spot exchange built entirely in the EVM layer of HyperPaxeer. It introduces six novel primitives that exploit chain-level advantages — custom precompiles, validator-integrated keepers, and native gas policy — to deliver execution quality that no protocol on a shared chain can match.

Oracle-Relative Orders

Orders stored as basis-point offsets from oracle price, not absolute prices

Dual-Mode Matching

Continuous in calm markets, sealed-bid batch auctions under volatility

Capital-Integrated

Funded smart wallets trade as first-class participants via Argus VM

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Six Primitives

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1. Oracle-Relative Order Book (OROB)

All orders and liquidity positions are stored as basis-point offsets from the oracle price, not absolute prices. A limit buy at “anchor - 5 bps” automatically follows the market. 
Traditional:    BUY 1 ETH @ $3,842.50   (stale in seconds)
OROB:           BUY 1 ETH @ anchor - 5 bps  (always relative, auto-tracks)
  • State compression: orders do not need repricing when the market moves
  • Fills outside configurable oracle bands are rejected (anti-manipulation)
  • LP positions track the market without active management
  • Resolution computed by precompile 0x901 (OROBResolver) — near-zero gas

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2. Adaptive Dual-Mode Execution

The protocol dynamically switches matching mode per market based on conditions:
ConditionModeBenefit
Normal / low volatilityContinuous — orders fill within the block they arriveFast UX, tight spreads
High volatility / anomalous flowSealed-bid batch auction — uniform clearing price per blockMEV-immune, fair execution
Trigger logic (on-chain, per market):
  • Oracle confidence interval exceeds threshold
  • Block volume > 3 sigma of rolling 50-block average
  • Governance-configurable sensitivity
Batch clearing price computed by precompile 0x902 (BatchClearing).

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3. Programmable Liquidity Vaults (PLVs)

Composable strategy vaults that implement a standard interface: 
interface ILiquidityVault {
    function quote(Side side, uint256 size, int256 oraclePrice, uint256 volatility)
        external view returns (int256 price, uint256 maxFillSize);
    function fill(Side side, uint256 size, int256 price) external returns (bool);
    function rebalance(int256 oraclePrice, int256 inventorySkew) external;
}
Building blocks: constant-product, concentrated-range, sigmoid, and linear base curves with volatility-scaling, inventory-skew, and momentum overlay modifiers. A factory contract lets anyone compose new strategies by parameter configuration alone.

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4. Proof-of-Fill-Quality (PoFQ)

fill_quality_score = 1 - |fill_price - oracle_price| / oracle_price
Every fill is scored against the oracle at execution time via precompile 0x904 (PoFQScorer). Vaults accumulate a rolling quality score on-chain. Higher score yields higher fee share, priority routing, and increased capital allocation from the Argus risk engine.

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5. Lazy Netting Settlement

[Trade Execution] → [Virtual Balance Update (same block)] → [Net Settlement (every N blocks)]
  • Users trade against virtual balances updated in the same block
  • Every settlement epoch (~5 blocks / 10 s), the protocol computes net transfers across all participants
  • Gas reduction: 5–10x vs. per-trade settlement
  • Fast-settle lane: 1 bps premium for same-block finality

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6. Capital-Integrated Trading

PaxSpot interfaces with the Argus VM for funded smart-wallet trading: 
┌──────────────┐     ┌──────────────┐     ┌──────────────┐
│   ARGUS VM   │────▶│ SMART WALLET │────▶│   PAXSPOT    │
│  Risk engine │◀────│ Capital set  │◀────│ PoFQ score   │
│  Allocation  │     │   by Argus   │     │ PnL feed     │
│  Drawdown    │     │ Allowance    │     │ Volume data  │
└──────────────┘     └──────────────┘     └──────────────┘
PaxSpot exposes IPaxSpotReader (PoFQ scores, PnL, positions) and enforces per-address limits via IAllowanceProvider. Funded wallets are indistinguishable from self-funded wallets at the matching-engine level.

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Contract Architecture

Built with Foundry, Solidity 0.8.24, OpenZeppelin v5.0.1.
ContractPurpose
PaxSpotRouterOrder gateway — signature validation, rate limiting, funded-wallet allowance checks
MatchingEngineOROB continuous + batch matching via precompiles 0x901/0x902/0x904
SettlementEngineVirtual-balance ledger, epoch netting, fast-settle lane
OracleAdapterPyth primary + Validator Oracle Module (VOM) fallback via precompile 0x903

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Custom Precompiles

AddressNameTypePurpose
0x901OROBResolverStatelessConvert offset orders to absolute prices and back
0x902BatchClearingStatelessCompute uniform clearing price for sealed-bid auctions
0x903OracleAggregatorStatefulConfidence-weighted median of validator-submitted prices (x/paxoracle)
0x904PoFQScorerStatelessScore fill quality against oracle at execution time

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Oracle Architecture

PaxSpot uses a two-tier oracle with automatic fallback:
  1. Primary — Pyth Network: Sub-second pull-oracle with confidence intervals
  2. Fallback — Validator Oracle Module (VOM): Validators submit prices via the 0x903 precompile (submitPrice). The x/paxoracle Cosmos SDK module aggregates submissions using a confidence-weighted median with staleness filtering (15-block threshold) and quorum enforcement.
contract OracleAdapter {
    function getPrice(bytes32 feedId) external view returns (int256 price, uint256 confidence) {
        // Try Pyth first; fall back to VOM if stale or unavailable
    }
}

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Test Results

155 unit tests, 0 failures, 95.73% line coverage (Foundry, vm.mockCall for precompiles).
ContractLinesBranchesFunctions
MatchingEngine98.87%89.47%100%
SettlementEngine98.06%100%94.74%
PaxSpotRouter98.48%91.67%100%
OracleAdapter96.25%83.33%100%
Local-chain integration tests (all passing):
  • Precompile 0x901 resolveOffset + toOffset
  • Precompile 0x902 computeClearing
  • Precompile 0x903 submitPrice + getValidatorPrice round-trip
  • Precompile 0x904 scoreFill
  • OracleAdapter getPrice (Pyth primary + VOM fallback)
  • MatchingEngine market creation + state query
  • PaxSpotRouter submitOrder end-to-end

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Resources

Spot Trading Design

Full technical specification

Smart Contracts

General deployment and verification guide