Introduction to BBOD (Part 1)

What is BBOD

BBOD ‘Blockchain Board of Derivatives’ is a next-generation cryptocurrency trading platform that offers high-leverage margin trading and spot exchange (crypto-crypto).

 

Problem

While centralised exchanges (Bitflyer, Bithumb, Binance) are fast and responsive, they are highly susceptible to custodial risk. On the other hand, fully decentralized exchanges (IDEX, EtherDelta) often face problems with high latency and high cost, which makes them impractical for high volume use and high-frequency trading.

 

Solution

BBOD decentralises the most security-critical features of cryptocurrency trading (settelment and custody) by utilising smart contracts.

 

BBOD’s Technical Infrastructure

Off-chain Architecture

  • Matching engine: The transaction system that routes and executes orders
  • Order management system: The graphical user interface for performing a wide variety of trading activities

BBOD’s custom trading engine was designed to be scalable to ensure that all orders are executed in real time. It can handle upwards of 1,250,000 messages per second with a latency of fewer than 25 microseconds. This places it ahead of the highest performance trading systems currently in global production.

In addition to the industrial-grade matching engine, BBOD offers a cutting-edge web platform to trade cryptocurrencies ensuring scalability and providing multi-language support.

On-chain Architecture

BBOD’s Protocol is a multi-Blockchain protocol that performs two main functions:

  • Enables custodial decentralisation
  • Facilitates mutual settlements between all the exchange participants

The first function means that each trader deposit coins into his personal wallet that is visible on Blockchain. There is no one point of failure (one central wallet) in case of an attack of an attempt to steal coins. The second function means that facilitates mutual settlement of cryptocurrencies on Blockchain every day. For example, if you bought BBD token and sold Ethereum – this transaction is visible on Blockchain on your personal smart contract.  

BBOD vs Centralised exchanges

Let’s compare BBOD’s protocol to that of centralised exchanges.

At standard centralized exchanges, like Bitflyer, traders deposit coins into one central wallet which is fully controlled by the owners of the exchange who have access to the private key. At BBOD, a trader deposit coins into their personal smart contract wallet that does not have a private key at all. This feature eliminates the possibility of hacks and ensures transparency.

Additionally, at centralised exchanges, a physical settlement on the Blockchain only occurs when traders ask to withdraw their funds. This is the moment when the exchange sends the coins to the traders’ personal wallet. Apart from the fact that an exchange can choose not to accept the request, there is another significant problem – the exchange may not be able to fulfil the request because of their lack of funds. BBOD’s protocol autonomously executes mutual settlements between participants every day using smart contracts. Traders do not need to ask to withdraw their funds. Moreover, due to the fact that the settlement is executed once a day, BBOD may prove solvency once the settlement is executed by the smart contract system.

The diagram below illustrates the high-level architecture of the BBOD Protocol

 

 

The following steps explain BBOD’s protocol:

  • Traders deposit Ethereum from their private wallet (eg. Metamask) to a segregated smart contract wallet at BBOD.
  • Traders are able to trade all available products at BBOD.
  • Once a day, BBOD’s Smart Contract Protocol calculates unrealised and realised profit or loss for each trader. The appropriate amount of coins are then added or subtracted from the traders’ smart contract wallet.
  • Once a day, traders may request to withdraw from their smart contract wallet to their private wallet. This request is then automatically accepted by BBOD’s Protocol if the amount to withdraw is equal to or less than their Available Balance.

Our next Introduction to BBOD article will explain our protocol in more detail.

Currently, the BBOD Protocol supports mutual settlements between all network participants on the Ethereum Blockchain. However, the protocol is easily scalable to any other Blockchain. In the future, the BBOD Protocol will additionally support mutual settlement between participants on the Bitcoin, EOS and NEO Blockchains.

 

Markets and Products

CryptoFX contracts: our high-leverage margin products that never expire.

  • Ethereum/USD
  • Bitcoin/ETH
  • Ripple/ETH
  • EOS/ETH
  • NEO/ETH
  • Binance/ETH
  • Elastos/ETH
  • Decred/ETH
  • Digibyte/ETH

Spot transactions:

  • BBD/ETH

BBOD will focus on expanding its product range offering more cryptocurrencies in both CryptoFX and Spot segments of the trading platform in addition to adding new deposit currencies (Bitcoin, EOS, NEO).

Deposit and Settlement Currency

BBOD accepts Ethereum as collateral. All profits and losses are calculated and settled in Ethereum. Traders may only deposit ERC-20 tokens. BBOD does not handle fiat currency.

BBD Token

The BBD token is the native currency of the BBOD trading platform. Just like Binance’s BNB coin, when you own BBD on BBOD, you save a considerable amount of money on trading fees.

Conclusion

In the next article, we will provide more insight into the BBOD Exchange, including details and examples of how profit and loss settlement is executed by our protocol.