Limit Orders
In addition to AMM-based liquidity pools, DotSwap offers an on-chain orderbook system tailored for Bitcoin-native assets such as BTC, Runes and BRC20. DotSwap Limit Orders introduces a limit order mechanism to complement the instant-swap experience of AMMs, enabling more advanced trading behavior and price precision.
The DotSwap Orderbook operates without relying on smart contracts or off-chain databases. Instead, it uses a distributed coordination layer and Bitcoin-native transaction logic to support secure, transparent, and user-controlled limit order execution.
Key Features
🔁 Hybrid Architecture
AMM + Orderbook: Traders can choose between market swaps (via AMMs) and limit orders (via the orderbook), depending on their strategy.
BTC-Native Matching: Orders are matched through a decentralized network of Nexus nodes and executed via multisig Bitcoin transactions.
🧾 Limit Order Mechanics
Users can place buy/sell orders with desired price and quantity.
Orders are propagated and maintained by the Nexus coordination layer, ensuring integrity and availability without reliance on a central database.
Once matched, a co-signed Bitcoin transaction is generated to settle the trade.
🔐 Non-Custodial Execution
Funds are held in user-controlled wallets until execution.
Finalized swaps require joint signing, ensuring no third-party custodianship.
⚖️ Price Discovery
Orders contribute to real-time liquidity discovery beyond pool-bound pricing.
Supports both passive makers and active takers, enabling more flexible trade flows.
Workflow
Order Placement
User submits a signed limit order via DotSwap frontend.
Order details are broadcast to Nexus matching nodes.
Order Matching
Nexus continuously scans for price overlaps between makers and takers.
Once a match is found, both sides are prompted for transaction co-signing.
Settlement
A multi-signature Bitcoin transaction is generated.
Once signed by both parties, the transaction is broadcast to the Bitcoin network.
Status Update
Orderbook UI reflects fill status (partial or full).
Unfilled orders can be canceled or modified at any time by the user.
Benefits
Advanced Trading Capabilities: Place orders at target prices with no slippage.
Decentralized and Secure: All operations are transparent and non-custodial.
Liquidity Diversity: Complements AMM pools with maker-driven depth.
Developer-Friendly: Orderbook functions can be integrated into external dApps or trading interfaces.
Use Cases
Price-Sensitive Traders: Execute trades only at preferred price levels.
Market Makers: Post passive liquidity without committing to pool exposure.
Institutional/Algorithmic Trading: Integrate with APIs for automated strategies.
Integration with DotSwap Ecosystem
The Orderbook is fully interoperable with other DotSwap modules:
Users can switch between AMM swaps and limit orders seamlessly.
Nexus LPs can participate in both CLMM provisioning and orderbook matching.
Diamond rewards apply to orderbook trading activity.
Conclusion
The DotSwap Orderbook represents a major leap forward in native Bitcoin trading infrastructure. By enabling decentralized, non-custodial limit orders alongside AMMs and CLMMs, DotSwap empowers traders with greater control, efficiency, and optionality—pushing Bitcoin DeFi toward full capital-market maturity.
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