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Standard market maker AVS

This is an Eigenlayer AVS by Standard to improve on solver design from async swap by CoWswap. The software was generated for capstone project for Uniswap hook incubator.

This project shows you the simplest functionality you can expect from an AVS with market making orderbook.

The diagram will give you a concrete understanding of the basic components with two cases.

1. Registering MM to service contract manager

mm-registration-png

There are 4 steps to this AVS registration for MM operators:

  • AVS operator wallet submits registration request for MM profile
  • Check Pair in DEX and make MM profile if operator.stake >= avs.minNeededStake
  • event: MMRegistered(bytes32 taskHash, address agent)
  • AVS operator client starts submitting orders

2. Verifying MM is acting as according to limit

mm-verification-png

There are 4 steps to this AVS verificaiton and penalty:

  • AVS verifier finds anomaly on order spread and verify
  • Suppose spl is spread limit, MMServiceManager gives penalty if pair.askHead >= marketPrice * (1 + spl) || pair.bidHead <= marketPrice * (1- spl) after getting bidHead(Highest Bid) askHead(Lowest Ask) prices
  • event: MMPenalized(bytes32 taskHash, address agent);
  • AVS operator client stops submitting orders

Where additional sophistication with AVSs come into the picture:

  • the nature of the request is more sophisicated than generating a constant string
  • the operators might need to coordinate with each other, but not sure how penalty is applied
  • the type of signature is different based on the constraints of the service
  • the type and amount of security used to secure the AVS
  • and so on...

Comparison

Standard Eigenlayer AVS market maker CoWswap Solver
Mission Spread buy/sell orders in the orderbook within 2% spread on market price Match orders in whatever solvers want
Verification method Measure bid/ask head price and check with last market price that its difference is within 2% of the market price in orderbook smart contract N/A
Transparent Yes N/A
Centralization Risk None, all transparent and clear, all done in smart contract Payment for order flow can happen.

Quick Start

Dependencies

  1. npm
  2. Foundry
  3. Docker

Steps

  1. Make sure Docker is running

  2. Run make start-chain-with-contracts-deployed

    2.1 This will build the contracts, start an Anvil chain, deploy the contracts to it, and leaves the chain running in the current terminal

  3. Open new terminal tab and run make start-operator

    3.1 This will compile the AVS software and start monitering new tasks

  4. Open new terminal tab and run make spam-tasks (Optional)

    4.1 This will spam the AVS with random names every 15 seconds

Deploy

Operator can be deployed with Railway thanks to Ponder after registering an operator wallet to service manager contract. Check this guide on how to deploy.

Extensions

  • Operator needs a minimum stake amount to make submissions
  • Add another strategy to the AVS
  • Operator must respond within a certain number of blocks