Conditional Orders

Conditional Orders Life Cycle


    /// "co" == conditional order

    /// @notice order details used to create an
    /// order on a perps market within a co
    struct OrderDetails {
        // order market id
        uint128 marketId;
        // order account id
        uint128 accountId;
        // order size delta (of asset units expressed in
        // decimal 18 digits). It can be positive or negative
        int128 sizeDelta;
        // settlement strategy used for the order
        uint128 settlementStrategyId;
        // acceptable price set at submission
        uint256 acceptablePrice;
        // bool to indicate if the order is reduce only;
        // i.e. it can only reduce the position size
        bool isReduceOnly;
        // tracking code to identify the integrator
        bytes32 trackingCode;
        // address of the referrer
        address referrer;

    /// @notice co
    struct ConditionalOrder {
        // order details
        OrderDetails orderDetails;
        // address of the signer of the order
        address signer;
        // a means to prevent replay attacks and
        // identify the order
        uint256 nonce;
        // option to require all extra conditions
        // to be verified on-chain
        bool requireVerified;
        // address that can execute the order
        // *if* requireVerified is false
        address trustedExecutor;
        // max fee denominated in $sUSD that
        // can be paid to the executor
        uint256 maxExecutorFee;
        // array of extra conditions to be met
        // on-chain *if* requireVerified is true
        bytes[] conditions;

Off-Chain Submission Process in Smart Margin v3

Conditional Order Placement

  1. Order Conditions: A trader must first define the conditions for the execution of a conditional order.

  2. Verification Choice: The trader decides if these conditions should be verified on-chain or off-chain.

  3. Setting the Verification Flag: To make this distinction, the ConditionalOrder.requireVerified flag is set to true for on-chain verification, or false for off-chain.

  4. On-Chain Verification: If requireVerified is true, the conditions in ConditionalOrder.conditions need to be met on-chain.

  5. Off-Chain Verification: If requireVerified is false, the specified conditions in ConditionalOrder.conditions will not undergo on-chain verification.

  6. Trusted Executor Assignment: For off-chain verification (requireVerified is false), a ConditionalOrder.trustedExecutor address must be set, indicating the trusted party for execution.

  7. Role of Trusted Executor: This executor is the sole entity capable of executing the order when requireVerified is false, acting on the presumption that off-chain conditions are met.

    • Note: The trader relies on the ConditionalOrder.trustedExecutor to execute the order only when the off-chain conditions are satisfied.

  8. Fee Specification: The trader specifies a maximum fee, ConditionalOrder.maxExecutorFee, they are willing to pay the executor for successful execution.

  9. Order Signing: The trader signs the ConditionalOrder using their private key.

  10. Order Submission: The signed ConditionalOrder is submitted to Kwenta, or another chosen party, for storage and processing by backend infrastructure.

On-Chain Execution Procedure

  1. Account Crediting: If not done already, the trader credits their account to cover future execution fees. In Synthetix v3 Andromeda, $USDC can be converted to $snxUSD for credit as demonstrated here.

Execution (Off- and On-Chain)

  1. Condition Monitoring: Kwenta's backend infrastructure continuously monitors the conditions set in ConditionalOrder.conditions.

  2. Execution Initiation: Upon condition fulfillment, an executor calls Engine.execute, submitting the ConditionalOrder (_co), its signature (_signature), and a proposed execution fee (_fee in $snxUSD).

  3. Execution Validity Checks: The transaction will fail if the _fee exceeds either the ConditionalOrder.maxExecutorFee or the account's available credit.

  4. On-Chain Verification for Execution: If ConditionalOrder.requireVerified is true, on-chain verification of conditions occurs before execution. This is gas-intensive and therefore expensive.

  5. Executor Flexibility with On-Chain Verification: Any address can execute the order if requireVerified is true.

  6. Off-Chain Verification for Execution: If requireVerified is false, no on-chain verification occurs before execution, making it less gas-intensive and cheaper.

  7. Executor Restriction with Off-Chain Verification: The ConditionalOrder.trustedExecutor must be the one executing the order if requireVerified is false.

  8. Execution Requirements: The ConditionalOrder will only be executed if specific criteria are met, including fee limits, account credit, nonce uniqueness, authorized signer, and signature validity.

  9. Order Execution: If all conditions are satisfied, the ConditionalOrder is executed, and the ConditionalOrder.nonce is marked as used.

Credit & Debit Management

With the integration of Conditional Orders (COs), the Engine contract now manages a credit balance for each account, utilized for executing successful conditional orders. This balance, denominated in $snxUSD, is not factored into the account's total margin, ensuring that its debit does not affect open position liquidation risks. Unlike previous versions, the credit in the engine is never locked, as conditional order submission is entirely off-chain, preventing the establishment of a fixed credit balance for outstanding conditional orders.

refer to this test suite for programmatic examples of managing account credit

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