Order Flow Auctions
Memswap uses Order Flow Auctions (OFAs) to help users capture value from their swap intents. The protocol is designed to enable a variety of OFA designs. At its core, the protocol is designed to facilitate an protocol-mediate OFA, by leveraging a fee escalator (dutch auction). This allows users to capture value as solvers compete to fill orders at the minimum auction price in any block. This design introduces a trade off between execution time and price.
To capture surplus, Memswap introduces Matchmakers, trusted third parties that conduct OFAs on behalf of users directly or facilitate builder-conducted OFAs. Matchmakers are opt-in and open, so applications can choose to work with a reputable third party or run their own matchmaker.
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