Introduction
This proposal outlines the development of a next-generation V3 Decentralized Exchange (DEX) on the Conflux blockchain. The project, tentatively named “FluxV3,” aims to introduce capital-efficient liquidity provisioning, NFT-based LP positions, and advanced trading infrastructure to the Conflux ecosystem.
Problem Statement: The existing DeFi landscape on Conflux, while growing, largely relies on early-generation Automated Market Makers (AMMs) to Uniswap V2. These platforms suffer from inefficient capital allocation, static liquidity, limited fee tiers, and outdated user experiences. This leads to underutilized capital for liquidity providers (LPs), increased slippage for traders, and hinders overall DeFi momentum on the network.
Proposed Solution
Our solution is a V3-style DEX purpose-built for Conflux eSpace. It will feature concentrated liquidity, multiple fee tiers, non-fungible liquidity positions (NFTs), active liquidity management, and advanced smart routing. This directly addresses the inefficiencies by maximizing capital utilization, providing LPs with precision tools, and improving trade execution.
Alignment with Conflux Network: The project is natively designed for Conflux, leveraging its high-throughput, low-fee, and EVM-compatible eSpace. This aligns perfectly with Conflux’s goals of fostering a robust DeFi ecosystem by providing a foundational liquidity layer that can attract more users, developers, and projects.
Benefit to the Conflux Ecosystem (Developer Enticement): This product will attract more developers to build on Conflux by providing well-structured, modular smart contracts that can be easily extended, forked, or integrated into other DeFi applications. As a native, high-performance V3-style DEX, it establishes a clear reference implementation for building advanced liquidity protocols on eSpace. Developers will benefit from studying and reusing proven patterns for concentrated liquidity, NFT-based LP mechanics, and dynamic fee-tier management making it a valuable foundation for future DeFi innovation within the Conflux ecosystem.
Economic Benefit (Asset and Transaction Increase): By introducing concentrated liquidity, the DEX will deepen on-chain liquidity, making Conflux more attractive to traders, aggregators, and institutional users. Higher LP returns and better fee structures are designed to attract sticky liquidity, significantly increasing Total Value Locked (TVL). The enhanced user experience, reduced slippage, and advanced features will drive higher trading volumes and more on-chain transactions.
Competitive Edge: Our FluxV3 differentiates itself by:
- Concentrated Liquidity: Allowing LPs to allocate capital within custom price ranges for superior capital efficiency.
- Multiple Fee Tiers: Offering flexible fee levels to align LP incentives with market characteristics.
- NFT-Based LP Positions: Tokenizing liquidity positions as ERC-721 NFTs, enabling personalization, tracking, and secondary markets for LP strategies.
- Active Liquidity Management: Empowering LPs to adjust positions in real-time, transforming them into active market makers.
- Advanced Smart Routing: Ensuring best price execution across different pools and fee tiers.
- Conflux-Specific Optimizations: Fully utilizing Conflux’s low gas fees, high throughput, and eSpace compatibility.
Conflux eSpace grant recipient wallet address: - cfx:aanfccegsjpgvya7yhm9wtnencfppnztwahu40u0xc
Technical Introduction
FluxV3 aims to establish a high-performance, scalable, and user-centric decentralized exchange infrastructure on Conflux eSpace. Its development is driven by the need to overcome the limitations of current AMM models on the network, which hinder capital efficiency, trade execution, and user engagement.
As highlighted in the Application Introduction, existing Conflux DEXs suffer from inefficient capital allocation, static liquidity, limited fee tiers, and suboptimal user experiences, creating a significant barrier to the network’s DeFi growth.
Current solutions are largely V2-style AMMs (e.g., those on Conflux already). While functional, they lack the advanced features necessary for robust, capital-efficient markets. The feasibility of a V3 DEX on Conflux is high due to Conflux eSpace’s full EVM compatibility, allowing for seamless deployment of Solidity smart contracts and leveraging established tools like Hardhat and MetaMask. The technical architecture draws inspiration from proven V3 AMM designs, adapting them to Conflux’s unique high-throughput and low-fee environment.
Purpose of the system
The primary purpose of this system is to introduce a next-generation AMM model that enables capital-efficient liquidity provisioning, improves trade execution, and enhances the overall user experience within the Conflux DeFi ecosystem.
Scope of the system: The system will encompass:
- Deployment of core V3-style smart contracts on Conflux eSpace.
- Development of a sophisticated Smart contracts for optimal routing and price precision.
- Creation of a modern, analytics-driven frontend for traders and liquidity providers.
- Support for multiple fee tiers and NFT-based liquidity positions.
Objectives and success criteria of the project:
- Introduce a Capital-Efficient AMM Model: Successfully deploy smart contracts enabling concentrated liquidity within specific price ranges. Success will be measured by increased capital efficiency for LPs compared to V2 models.
- Empower Liquidity Providers (LPs): Provide LPs with flexible fee tiers and NFT-based positions. Success will be measured by the diversity of LP strategies and engagement.
- Improve Trade Execution: Reduce slippage and increase price accuracy. Success will be measured by observed slippage rates and user feedback.
- Enhance User Experience: Deliver a modern, analytics-driven interface. Success will be measured by user retention and engagement metrics on the frontend.
Technical Proposal
1.Functional Overview of Your System
FluxV3 will be structured across three primary layers:
- Smart Contract Layer: This layer, deployed on Conflux eSpace, will house the core logic for concentrated liquidity, multiple fee tiers, and NFT-based liquidity positions. It will enable real-time liquidity adjustments and dynamic trade execution. Each LP position will be minted as a unique ERC-721 NFT, encoding its specific price range, token pair, and chosen fee tier. Smart routing logic will be embedded to aggregate liquidity across various pools and fee tiers, ensuring optimal execution paths for trades.
- Liquidity Engine Layer: This dedicated engine will manage the core AMM logic, including swap path calculations and complex pool interactions. It will act as the protocol’s brain, ensuring efficient routing and capital optimization. Key functionalities include smart order routing to fetch the best price from available pools across different fee tiers, tick-range mathematics for precise pool movements, and integration with price oracle logic for real-time price indexing. The system will support multi-hop trades and be compatible with fee-on-transfer tokens.
- Frontend and Interface Layer: The user interface will be a modern, responsive, and analytics-driven application. The trading dashboard will offer real-time analytics, order book visualizations, and comprehensive portfolio performance tracking. The LP portal will allow users to intuitively create, modify, and track their liquidity positions, view fee earnings and APRs, and manage individual NFT LP assets. Advanced trade execution tools such as slippage controls, impact previews, and gas/route optimizations will be integrated.
Core aspects of your system
- Concentrated Liquidity: LPs can set custom price ranges for their liquidity, significantly boosting capital efficiency.
- Multiple Fee Tiers: Offers varied fee levels (e.g., 0.05%, 0.30%, 1.00%) to align with different asset pair volatilities and LP risk appetites.
- Non-Fungible Liquidity Positions (NFTs): Each LP position is tokenized as an ERC-721 NFT, allowing for unique management, tracking, and even secondary trading of positions.
- Active Liquidity Management: Tools for LPs to dynamically adjust their positions based on market conditions, enabling better risk-adjusted yields and impermanent loss mitigation.
- Advanced Smart Routing: Algorithm to find the most efficient trade path across multiple pools and fee tiers to minimize slippage for traders.
- Enhanced Trading Interface: A user-friendly frontend providing real-time analytics, LP portfolio dashboards, trade impact simulation, and position ROI tracking.
- Modular Architecture & Upgradeability: The system will use upgradeable smart contracts and a modular design to support future additions like plug-and-play LP strategy vaults, DAO-controlled fee tiers, automated risk management add-ons, and governance upgrades.
- Conflux-Native Design: Leveraging Conflux’s low gas fees and high throughput for optimal performance and user experience.
Non-functional overview
- Usability: The system prioritizes an intuitive, responsive, and analytics-driven user experience. The enhanced trading interface and LP portal are designed to reduce friction, improve onboarding, and increase user engagement. The goal is to make advanced AMM features accessible to a broad user base.
- Reliability: The system will undergo rigorous QA and security testing, including unit/integration testing, manual QA, and preparation for third-party audits. This commitment to testing ensures the stability and integrity of the smart contracts and frontend, minimizing downtime and errors.
- Performance: Leveraging Conflux’s inherent strengths—low gas fees and high throughput—the DEX is designed for optimal performance. This will facilitate frequent LP repositioning, high-frequency trading, and rapid transaction processing, crucial for a competitive trading environment.
- Implementation: The architecture is built to be modular and extendable, supporting future upgrades and integrations within the Conflux ecosystem. This approach ensures long-term viability, adaptability, and the ability to incorporate new features or respond to evolving market demands.
- User Interface: The UI will feature a clean, modern design that is visually appealing and highly functional. It will include real-time data visualization, clear navigation, and comprehensive tools for both traders and LPs to manage their assets and strategies effectively.
Total Budget
Grant Size: $45,000
- Revised Justification: The total requested grant amount of $45,000 is justified by the following detailed breakdown of activities and associated costs:
- Project Kickoff & Planning (Week 1): $5,625
- Outcome: Finalize technical specifications, team alignment, and UI wireframes.
- Smart Contract Development (Weeks 2–4): $5,625
- Outcome: Build and test core contracts for pools, fees, NFT positions, and routing.
- Liquidity Engine Integration (Weeks 5–6): $5,625
- Outcome: Implement tick math, oracle support, and routing logic for price precision.
- Frontend Development (Weeks 7–8): $5,625
- Outcome: Build LP dashboards, trading UI, and real-time analytics integration.
- QA & Security Testing (Weeks 9–10): $2,250
- Outcome: Perform unit/integration testing, manual QA, and third-party audit prep.
- Deployment on Conflux Testnet (Week 11): $1,688
- Outcome: Launch public beta on Conflux eSpace testnet and open for external feedback.
- Mainnet Launch & LP Onboarding Tools (Week 12): $1,688
- Outcome: Deploy to mainnet, onboard first LPs, publish docs & analytics dashboard.
Development Roadmap (Timeline and Milestones):
- Week 1: Project Kickoff & Planning
- Deliverable: Finalized technical specifications document, detailed team alignment plan, and comprehensive UI wireframes.
- Weeks 2–4: Smart Contract Development
- Deliverable: Deployed and thoroughly tested core smart contracts for liquidity pools, flexible fee mechanisms, NFT-based liquidity positions (ERC-721), and initial routing logic on a development environment.
- Weeks 5–6: Liquidity Engine Integration
- Deliverable: Implemented and integrated tick math for concentrated liquidity, initial price oracle support, and robust routing logic to ensure high price precision and efficient swap paths within the AMM.
- Weeks 7–8: Frontend Development
- Deliverable: Functional LP dashboards for liquidity management, a comprehensive trading user interface with essential features, and initial real-time analytics integration displaying key pool metrics.
- Weeks 9–10: QA & Security Testing
- Deliverable: Completed unit and integration testing reports, manual QA findings document, and a prepared package for third-party security audit (e.g., audit scope, preliminary documentation).
- Week 11: Deployment on Conflux Testnet
- Deliverable: Public beta launch of the V3 DEX on the Conflux eSpace testnet. Open for external feedback, with a dedicated channel for bug reports and suggestions.
- Week 12: Mainnet Launch & LP Onboarding Tools
- Deliverable: Full deployment of the V3 DEX to the Conflux mainnet. Launch of tools and documentation to facilitate initial LP onboarding, and a public analytics dashboard for monitoring protocol health and performance.
Team
- Nishant Mitra - Tech Lead
A blockchain expert and IIT Kharagpur alumnus, Nishant architects cutting-edge decentralized solutions and ensures robust technical execution. - Prashant Hooda – Product Manager
Prashant drives product innovation, ensuring user-centric solutions that align with evolving market needs and technological advancements. - Ankit Bhatia- Developer
Ankit is expertise in Solidity, smart contract security, advanced DeFi protocols and dApp development on EVM-compatible chains.