Akron Crossing Network
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Akron Crossing Network is a decentralized alternative trading system (ATS) or exchange created for traders seeking to execute large positions on-chain with minimal price impact.
🔖Origin
In the traditional stock market, traders such as hedge funds who wish to execute large positions find it appealing to split orders into small pieces, at the cost of foregoing immediate execution, in order to get a better execution price. But this method of execution is not immune to adverse price impact. If the size is large enough, even splitting orders into small pieces changes spot prices on NYSE or NASDAQ.
That is why some traders with large positions prefer to use alternative trading systems (ATS) such as crossing networks such as Sigma X or POSIT. On a crossing network, there are no market makers. There are only traders whose motives are to convert their asset into another and not to make fees. Therefore, traders are able to execute their large orders with minimal price impact and, if there are many such traders, within a predictable time frame.
The current median swap size on decentralized exchanges is small, usually a few thousand dollars (https://dune.com/queries/5154/10158). For larger swap sizes, decentralized exchanges are known for causing adverse price impacts, leading traders to opt for centralized exchanges and prime brokerages to execute their large positions.
Akron Crossing Network aims to decentralize the execution of large orders by creating a decentralized ATS or exchange that enables traders to execute large positions without worrying about the price impact their orders may cause.
🧬Execution Architecture
There are two categories of traders on Akron Crossing Network: order creators who first create large orders and post their assets to the exchange, in a manner similar to a liquidity provision at most decentralized exchanges, and swap traders who execute, usually in small sizes, against large orders created by order creators. The execution price is sourced externally from reliable decentralized exchanges called the source pool.
Order creators pay a fee that mirrors the source pool’s fee. If the Uniswap USDC/ETH 0.05% Pool is the source pool and the fee is 5bp. This fee is accrued in the protocol if orders are matched or crossed against each other. Otherwise, if an order is atomically swapped by a swap trader, the maker’s fee goes to the swap trader rather than the protocol.
The benefits of Akron Crossing Network are significant for both order creators and swap traders. Order creators can execute their large positions with minimal price impact by executing at the market’s spot price, while swap traders also benefit from minimal price impact. Swap traders also earn a fee paid by the order creators. (ie. Swap-to-Earn).
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