White paper
Overview
The Next Generation DEX to Empower Bitcoin EcosystemHibit is a decentralized exchange with omni-chain compatibility and user experience of CEX. Some key features include:
BTC ecosystem full support: Hibit enables 0 gas trading of all BTC ecosystem assets, such as BRC20 tokens.
Inter-chain liquidity: Hibit adopts TSS to ensure seamless transactions across all chains.
High performance and ultimate user experience: Hibit has a unique design of Hybrid Consensus Protocol (HCP) that allows high performance of the system.
Low fees: Hibit offers a highly competitive fee structure.
You can explore further details about the design and implementation of Hibit and find helpful guides in this documentation.
Background
The Bitcoin ecosystem is showcasing a significant wealth creation effect, with BRC20 assets under the Ordinals protocol, ARC20 under the Atomicals protocol, and tokens in the Bitcoin expansion sector. The market size of BRC20 tokens has now exceeded US$4 billion, a nearly 40x increase from the $100 million in March of 2023. This growth has also fueled continuous innovation and development across the entire Bitcoin ecosystem.
Problem we are addressing
In line with market consensus, we also believe that the Bitcoin ecosystem is going to be the engine of the next bull market.However, due to technological complexities and limitations, there are no easy-to-use exchanges to trade assets within the Bitcoin ecosystem. The method that we are using now is costly, cumbersome, and prone to error.This significantly reduces trading efficiency and hinders the ecosystem's rapid growth.
Why Hibit
That's why we designed Hibit, a DeFi platform tailored for the next generation of BTC users and innovators.Hibit operates as a fully decentralized platform that automatically lists all BRC20 Tokens and provides built-in inscription services. We support 0 gas (yes, 0) for btc asset transactions. Moreover, Hibit's hybrid consensus mechanism ensures users can seamlessly trade Omni-chain assets.Our goal is to help users trade with a better experience by offering a seamless DeFi experience. By enabling users to trade freely, conveniently, and securely, our ultimate vision is to shape the emerging Bitcoin DeFi landscape and help the Bitcoin ecosystem grow.
Core mechanisms
Some important features of HibitThese are the core designs of Hibit that enable high performance and ultimate user experience of the system.
🤖Hybrid Consensus Protocol
The core of Hibit's innovation is the Hybrid Consensus Protocol (HCP), which seamlessly integrates smart contracts on Bitcoin Layer-1 and a proprietary blockchain system on Layer-2. Each HCP Node on Layer-2 functions as a self-contained blockchain system. By transferring the consensus of Layer-2 blockchain systems to Bitcoin Layer-1, Hibit achieves transaction processing capabilities exceeding one million transactions per second (TPS). This scalability not only sets Hibit apart from other decentralized exchanges (DEXs) but also empowers Bitcoin in the DeFi landscape.
Architecture
Consensus
HCP adopts an innovative hybrid consensus protocol. The separation of consensus and transaction processing responsibilities is achieved by assigning the consensus role to Layer-1 smart contracts and the transaction processing role to Layer-2 nodes. In common blockchains like Bitcoin and Ethereum, nodes are responsible for both transaction processing and consensus. And nodes need to communicate with each other multiple times to complete the entire consensus process. The separation of responsibilities in HCP allows nodes to fully utilize their computational resources for transaction processing. This innovation avoids delays in transaction processing caused by information exchange among nodes during consensus. After independently processing transactions, each node forms an independent block. By submitting block headers to Layer-1 smart contracts and reaching consensus through a simple majority vote, HCP achieves consensus. Therefore, the transaction processing speed of HCP nodes can reach the same level as CEX (1m+ TPS) through the memory level acceleration.In conclusion, Hibit's innovation in HCP significantly increases the speed of node transaction processing without reducing decentralization. This Hybrid Consensus Protocol provides excellent support for large-scale transaction processing in various domains, including financial transactions, social software, games, and other specialized areas.
Block Header
Block Header includes the Blockhash of the previous block, the Merkle root of the transaction list, the Merkle root of state changes, and the Merkle root for the integrity verification tree of shard data, etc.
Block Body
Asset Custody
HCP, as a complete blockchain system, hosts its assets entirely in a decentralized manner on chain (Layer-1) within smart contracts securely and transparently. Based on TSS (Threshold Signature Scheme), the smart contracts in HCP Layer 1 hold keys in ECDSA/EDDSA formats. These keys are generated based on the node's root key shard and derivation path. The node's key is generated through DKG (Distributed Key Generation) involving multiple nodes. As a result, no single node or individual possesses the complete key. Only after signing by multiple nodes and collecting a sufficient number of signatures by validating nodes can the signatures be combined into a valid signature. Based on TSS, this approach enables contracts to achieve secure and reliable decentralized asset custody.
🚁Hybrid Order-matching Engine
Hybrid Order-matching Engine
Hibit adopts a Hybrid Order-matching Engine that enables users to obtain the best execution prices, whether they choose Orderbook or Swap. Hibit's Orderbook and Swap represent two separate liquidity pools. Orderbook follows the traditional order book model, while Swap utilizes the AMM (Automatic Market Maker) V2 model. Hibit splits the liquidity from these two pools and cyclically matches the best execution prices from both pools. Therefore, users will receive the optimal execution price regardless of the chosen trading method. To provide users with a clear view of the combined liquidity from both pools on the Orderbook, the liquidity from Swap is algorithmically overlaid onto the current order depth of Orderbook. This means that users see the real depth of orders combined with the virtual depth mapped from the liquidity of Swap.This hybrid approach accommodates the trading preferences of users in both methods while also facilitating easy market-making support for project teams through AMM protocol.
Combining AMM & Orderbook
An Automated Market Maker (AMM) transforms the traditional model of buy and sell orders in an orderbook market into a system where two assets are pooled together, each having a value in relation to the other. When one asset is exchanged for the other, the relative values of these two assets fluctuate, leading to the establishment of a new market rate for both. In this mechanism, a buyer or seller conducts transactions directly with the pool instead of engaging with specific orders placed by other participants. Hibit AMM advances the DeFi ecosystem by offering liquidity providers greater capital efficiency, control, and flexibility and implementing new functionalities not achievable with the current AMM solutions. Please refer to the Rewards Program for further details.Hibit adopts a comprehensive approach to liquidity by combining the strengths of AMM and orderbook. This ensures optimal liquidity for users and addresses common issues such as trading slippage often observed in traditional AMMs.
🛸Omni-Chain Compatibility
Hibit's distinctive design enables seamless integration across all blockchains, covering everything from wallet connections to asset transactions. With Hibit, there is no need for any cross-chain bridges.
Threshold Signature Schemes (TSS)
One standout feature of Hibit is the incorporation of Threshold Signature Schemes (TSS), enabling native code support for transactions across all blockchains. This eliminates the necessity for cross-chain bridges, improving compatibility and safety within diverse blockchain ecosystems. With TSS implementation, Hibit's custodial asset smart contracts can directly sign transactions for corresponding public chains like BTC and ETH. As a result, we can smoothly integrate into all ecosystems.
Multi-chain wallet compatibility
Hibit's self-developed Layer-2 ensures direct integration with all crypto wallets. The platform's proprietary key infrastructure and intermediary layer enable flexible wallet integration, providing compatibility with multi-chain wallets.
Get started
In this unit, Hibit team will introduce you to the four parts of deposit, trade, fee structure, and withdrawal in detail.🪙PAGEDeposit📈PAGETrade👩💼PAGEFee Structure📤PAGEWithdrawal
🪙Deposit
Users effortlessly connect their wallets, initiating asset deposits into the Layer-1 asset custody contract.
📈Trade
Orders are directly submitted through connected wallets, initially processed by the centralized front-end trading engine, providing users with immediate trading results.
Signed transactions from users' wallets are sent to the Layer-2 blockchain system for processing, ensuring the security and efficiency of each transaction.
💼Fee Structure
Transaction fee rate is 0.3% without any other charges.
Layer2 has no gas fees.
📤Withdrawal
Withdrawals are categorized into Layer-2 and Layer-1 for enhanced flexibility, user convenience and reliability
Layer-2 Withdrawal
Users initiate withdrawals on the DEX, and transactions are forwarded to Layer-2 for verification and processing. Each Layer-2 node verifies transactions, packages them into a block, and submits withdrawal transaction data to the Layer-1 data shard contract. The asset custody contract executes the user's withdrawal process on the chain and transfers assets to the user.
Layer-1 Withdrawal
In any case the DEX is inaccessible, users can initiate a forced withdrawal request directly using their wallets. If Layer-2 fails to respond (in very extreme scenarios) within a specified timeframe, users can force withdraw assets based on the asset balance snapshot provided by Hibit on the chain every 10 minutes.
Risk Management
Decentralized Structure
Hibit's decentralized structure is designed to eliminate the possibility of market manipulation, fostering trust and transparency in every transaction.
Node Infrastructure
With over 200 nodes and the capability to support much more, Hibit establishes a robust and fully decentralized network, enhancing security, reliability, and resilience against potential attacks.
Self-developed Risk Management
Employing a self-developed risk management robot alongside third-party smart contract audits, Hibit ensures continuous tracking of safety performance from operational to code levels.
Last updated
