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Stop-Limit for AMM & Limit Orders

The most practical Stop-Limit for AMM & Limit Orders in the DeFi.
While the potential of the cryptocurrency market is limitless, we acknowledge that the market is still in its early stages of innovation, making it immature and unpredictable.
This is evident from the crashes of many cryptocurrencies over the past year due to fear, uncertainty, and doubt (FUD) or uncontrollable market influences. As with any innovation in its early stages, volatility is expected, but it's also important to acknowledge that many people did significantly lose their money and stability beyond their limits in these situations.

Introducing Stop-Limit for AMM (SLAMM)

For the first time in DeFi, Arken has developed a Stop-Limit for AMM (Automate Market Maker) to help users manage their risks and execute their strategies for assets in decentralized exchange. Based on Arken Finance’s two distinct technologies: TxFlow & Best Rate Engine 3.0, this feature can help save our users the trouble of managing risks and reaching their limits.
Before jumping into how things work, it is important to understand the differences between Limit Order and Stop-Limit Order in DeFi.

What is a Limit Order?

In DeFi, a limit order is a peer-to-peer order with a specific price. Unlike the stock market's limit order, it requires a match with an opposite position from another user to execute. This allows you to buy tokens at a lower price or sell them at a higher price, regardless of the current market price.
Unlike swaps where trades are executed instantly at the current market price, a limit order gives you more control over the execution price. As limit orders are automated, you don’t have to monitor the market 24/7 or worry about missing a buy or sell opportunity while inactive. Please be aware that your buy limit order position will be fulfilled by other users’ sell limit order position with the same requirements. Thus, there are no partial fills for the limit order and you’ll get the exact amount of tokens at the price you requested with no deviation.
In short, for Limit Orders, you control the buy/sell price of your own, without the influence of the current market price. However, do not mistakenly use limit order for the stop loss purpose!

What is a Stop Limit Order for AMM?

A stop-limit order is a limit order that has a stop price to trigger the order execution. Once the market price reaches the stop price, it triggers the limit order. Note: the limit price doesn’t necessarily need to be the same as the stop price.
How does a stop-limit order work? There are two parts to our stop-limit order:
  • The stop price acts as a trigger to place a limit order.
  • When the market price of a token reaches the stop price, it automatically creates a limit order with the custom price set by the user (limit price). The order is then executed across the integrated pools that Arken has.
In short, Stop-Limit Order will execute when the current market price of a token reaches your desired price.

Comparing Order Types

Types
What it does
For
Swap
Trigger order right away
Getting current price with best rate
Limit Order
Trigger order at specific price
Buy cheaper price/ sell high price
Stop Limit Order
Trigger order after the specific price reached
Emergency position enter/exit

How is our SLAMM different?

Arken’s Stop-Limit for AMM (SLAMM) is extremely secure. Unlike other protocols, we don't access your wallet to execute transactions. We reserve funds at the start of order creation and only execute the order when ready. If the order is not executed within the set timeframe, the reserved funds will be transferred back to your wallet.
With the power of our core technologies, TxFlow and Best rate Engine 3.0, we can also offer you the fastest and most accurate order in the market, right when you need it.
  • TxFlow is the world’s fastest blockchain indexing engine. With TxFlow, SLAMM can detect the change in the price of any token on our supported chain faster than anyone else. This means we can decide which Limit Order/Stop-Limit to be executed and respond to the market faster than anyone.
  • With our Best Rate Engine, the signal from TxFlow will trigger our Best Rate Engine to execute orders for our users. The Best Rate Engine monitors the state of many DEXes and finds the best price for that particular order.
Arken does not collect any fees if a transaction is not executed. Users will receive a full refund of their funds, with no fees deducted. Please note that this policy does not apply to gas fees.

Mechanics Behind SLAMM

In the current version, only certain stablecoins are compatible with SLAMM. As for the other side of the transaction, users can select any tokens. However, It's important to note that Stop-Limit for AMM is not recommended for tokens with tax. Due to our product execution method involves multiple hops of funds during execution, which may result in paying multiple token taxes.
To make it easier for you, we have curated a list of eligible stablecoins to use with SLAMM here:
  • USDT
  • USDC
  • DAI
  • BUSD
  • MIM

Fees Collection & Calculation

Base Fee Model

To use Arken Finance's Stop-Limit for AMM or Limit Orders, an operational fee is applied based on a base fee model, varies depending on the day of the week and time of day. The fee structure is adjusted for weekends and certain off-peak hours due to changes in network gas fees. This fee includes the gas fee and a small reserve for fluctuations.
The maximum operational fee for this feature is set at 0.25%, with a minimum of a constant-based number that can be varied depending on the gas fee of each day. If the fee for that specific time of the day is lower than 0.25%, the collected fee will be adjusted accordingly, based on the real-time circumstances.
Users can recheck the fee at the bottom of your swapbox, as shown in the example below:
Arken Finance collects operational fees in stablecoins. For example, when placing a 'Buy Stop-Limit' order for a particular token, the fee will be collected from the stablecoins used to purchase that token. On the other hand, when executing a 'Sell Stop-Limit' order, the fee will be collected from the stablecoins received from selling the token.

Fee calculation:

Arken Stop-Limit for AMM & Limit Order fee = 0.25% (or a constant-based number) x (execute amount in stablecoins)

Examples of Buying and Selling Using SLAMM

Buy Stop-Limit (Follow buy)
Sell Stop-Limit (Stop Loss)
Suppose the current price of ETH is $1000 (USDT), and you plan to start buying it when it enters the bullish trend. However, you don't want to rush to buy it now. You want to make sure that the chart performs the uptrend movement first, so you need to limit the price you will pay.
If you believe that ETH may start an uptrend if it breaks above $1100, you can use a buy stop-limit order to open a position in case of a breakout. You can set your stop price at $1100 and your limit price at $1150. Once ETH reaches $1100, the engine is triggered, and a limit order to buy ETH at $1150 is placed. Your order may be filled at $1150 or lower, but never above $1150, as that is your limit price, and any higher amount will render the transaction invalid.
Suppose you purchased ETH at $1000 (USDT) and the current market price is $1100. To minimize your risk and avoid potential losses, you opt to use a stop-limit order to sell ETH if the price drops back to your entry.
You create a sell stop-limit order with a stop price of $1050 and a limit price of $1000 (the price you originally bought ETH at). If the price hits $1050, a limit order to sell ETH at $1000 will be placed.
Notes Before Using SLAMM
Please Do Your Own Research. Understanding the differences between the features is highly recommended before any attempt at usage.
Arken’s Stop-Limit for AMM is not recommended for tokens with tax. Due to our product execution method, several hops of funds will be made during the execution, which may result in paying several times the token tax.
Arken's SLAMM is currently available on Arbitrum, BSC, Avalanche and more to come!