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Mentors:

Rhic Chowdhury

Head of Sales & BD, Biconomy
Account Abstraction

BI 001 Perpetual Trading with AA

Problem Statement

  • The goal of this idea is to give a CEX like trading experience, using Account Abstraction, in an onchain dApp.
  • Many Perps & Options projects are already using AA in some way or another to simplify the UX
  • dydx gives gasless onboarding, Polynomial is giving users smart contract wallets, but no one is using the 4337 stack yet.
  • With ERC4337, you can give a gasless, one click experience, to truly allow non-web3 native traders to use decentralized alternatives to Binance & crew.

Potential solution

  • Create a Trading Account for users that‚Äôs a Smart Contract Wallet, allowing you to plug in custom modules within the wallet wherever required
  • example would be to have a module in the contract wallet itself that allows the user to use funds there as collateral against leverage.
  • Session keys can be used to avoid requiring signatures in a session where time is of the essence. You can give a gasless experience in dApp, or allow users to pay gas in stablecoins.
  • Multiple transactions can be batched, removing needs for approvals & multiple clicks, and save on some gas in the process.

Challenges you may have to overcome

  • Building a perpetual trading platform involves dealing with complex technical aspects such as smart contract development, blockchain integration, order book management, and real-time trading engine implementation.
  • Building mechanisms to incentivize liquidity providers, integrating with external liquidity sources, and implementing efficient market-making strategies are essential components.
  • Managing risks associated with perpetual trading, such as price volatility and liquidation events, requires implementing robust risk management mechanisms.

Business model

The business model for this idea would involve a fee-based model, where you make money off the fees on each trade, with separate Maker & Taker fees.

Market Opportunity

Trading is a massive market - dydx did $790m of trades in the last 24 hours, because it’s able to deliver Account Abstraction using Starware, and has simplified onboarding from Ethereum, making it the market leader amongst decentralized perpetuals platform. GMX is 2nd, with a daily trading volume of ~$500m

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