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The Dex module implements a decentralized exchange on Neutron, providing users with the ability to trade tokens, provide liquidity, and place limit orders. The module introduces a novel AMM design centered around constant-price liquidity pools that offer simplicity, flexibility, and capital efficiency.
Duality Orderbook: This module powers Duality, Neutron’s protocol-native orderbook that combines the advantages of orderbooks and AMMs. For a complete overview of Duality’s features, architecture, and ecosystem integrations, see the Duality documentation.

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Key Features

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Constant-Price Liquidity Pools

The fundamental building block of Neutron DEX is the constant-price liquidity pool, where liquidity is concentrated at specific price points (ticks). This design:
  • Enables zero or near-zero slippage trades for stablecoins and highly correlated assets
  • Allows liquidity providers to precisely target their capital to specific price ranges
  • Significantly improves capital efficiency compared to traditional AMM designs

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Flexible Trading Options

Neutron DEX supports multiple trading mechanisms:
  • Market Orders: Swap tokens at the current market price via multi-hop routing
  • Limit Orders: Place orders to buy or sell tokens at a specified price
  • Liquidity Provision: Add liquidity to pools and earn trading fees

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Shared Liquidity

Neutron DEX reduces liquidity fragmentation through its shared liquidity model:
  • All liquidity providers share the same underlying pools
  • Liquidity providers can create any feasible AMM curve by distributing liquidity strategically
  • Trading volume aggregates across all liquidity providers, enhancing capital efficiency

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Module Capabilities

The Dex module enables:
  1. Pool Management: Create and manage liquidity pools with specific price points and fee levels
  2. Deposits and Withdrawals: Add or remove liquidity from pools
  3. Swapping: Execute trades between token pairs with optimal routing
  4. Limit Orders: Place, fill, and cancel limit orders
  5. Fee Collection: Earn fees as a liquidity provider proportional to contribution

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Integration with Neutron

The Dex module is a core component of Neutron, leveraging the blockchain’s:
  • Fast finality for trade execution
  • MEV protections at the consensus level
  • Low transaction costs through app-specific infrastructure
  • Integration with other Neutron modules like the Transfer module for IBC tokens

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Trade Types and Order Matching

Neutron DEX provides several limit order types:
  • Good Til Cancelled (GTC): Remain active until explicitly cancelled
  • Fill or Kill (FOK): Execute entirely or not at all
  • Immediate or Cancel (IOC): Fill as much as possible immediately, then cancel any unfilled portion
  • Good Til Time (GTT): Remain active until a specified expiration time
  • Just in Time (JIT): Special limit orders that can only be filled by takers
Order matching follows a price-time priority model, where orders at better prices are filled first, and within the same price, older orders take precedence.
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