Open DotSwap

Architecture

Overview

DotSwap is a modular Bitcoin-native DEX infrastructure designed to support decentralized swaps, liquidity provisioning, and financial coordination for UTXO-based assets including BTC, Runes and BRC20. The architecture is composed of several core components that work together to enable secure, non-custodial, and efficient trading without relying on smart contracts.

1. Liquidity Infrastructure

1.1 DotSwap LP Pools (Custodial CPMM)

  • Operate on the Constant Product (x * y = k) model

  • Funds managed via MMM (Multi-layer Multi-signature Matrix) with MPC and Bitcoin native multi-sig

  • Custody secured through partners like Safeheron and Slowmist

  • Supports direct deposits of BTC + BRC20/Runes for earning swap fees

1.2 Nexus LP Pools (Self-Custodial CLMM)

  • Operated by LPs running Nexus nodes

  • Support custom price ranges, fees, and liquidity depths

  • All funds are self-custodied and coordinated via threshold multisig

  • Transactions are co-signed and broadcast to the Bitcoin network

2. Trading Execution Layer

2.1 Instant Swaps (V1 Engine)

  • Users deposit assets into a multisig-managed DotSwap account

  • Internal ledger updates balances instantly

  • Suitable for high-frequency and low-latency trading

2.2 Limit Orders

  • Off-chain coordinated orderbook using Nexus network

  • Users sign and submit limit orders

  • Orders are matched off-chain, settled with co-signed on-chain Bitcoin transactions

2.3 AMM Swaps

  • Users interact with CPMM or CLMM pools for permissionless swaps

  • Routing logic selects the best price across available liquidity sources

3. Coordination Layer: DotSwap Nexus

The Nexus Coordination Layer is the backbone of DotSwap’s decentralized execution system. It handles:

  • Order Matching: Coordinates limit order matching across interfaces and APIs.

  • Multisig Signing: Handles threshold multisig signing to enable non-custodial swaps.

  • Routing: Finds optimal trade paths using AMMs and limit orders.

  • Interface Bridge: Connects frontends, LPs, and coordination logic securely.

Nexus is modular and can be integrated into external products (wallets, dApps, aggregators) for embedded liquidity.

4. Security & Custody

  • MMM Framework: Used in custodial pools, powered by MPC and multi-sig

  • User-Controlled Funds: Nexus LPs retain control throughout the lifecycle

  • Audited Infrastructure: Partnerships with Safeheron and Slowmist ensure operational security

  • HTLC Fallbacks: For reclaimability in Bitcoin Channels and fallback exits

5. Ecosystem Interfaces

5.1 Swap API & SDK

  • Programmatic access to liquidity, order routing, and TX generation

5.2 Wallet Integrations

  • Native compatibility with Unisat, Xverse, OKX Wallet

  • Enable swaps and LP interaction directly from user wallets

5.3 Diamond Reward System

  • Activity-based point system used across all modules

  • Powers user incentives, airdrops, and governance mechanics

Conclusion

DotSwap is designed from the ground up for Bitcoin-native DeFi. Its layered architecture balances speed, security, and flexibility—providing builders and users with a reliable foundation for trading, liquidity, and innovation across the Bitcoin ecosystem.

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