Protocol Framework

Network

The Network is the top layer of the fxdx framework which includes all markets, products, participants, and governance behaviors. The physical fxdx network can be divided into multiple blocks in order to achieve the required scalability. Most transactions are governed at the network level, this maintains many network parameters, collateral, and balances.

Products

The product will define behaviors of trades, it contains the metadata required to inform the protocol about various product parameters. Such as the source for an underlying data feed, the strike price, and other inputs needed to create an instrument using the product. The product can also utilize external data, such as the price from another market or event occurrence. This data can come from the fxdx market or special signed transactions from pre-approved oracles.
The protocol is a domain-specific smart contract, that defines the points of interaction between the product and other components of the network. However, it does not explain or control the functions of the product itself. The product directly interacts with the protocol when the position is closed. It also indirectly interacts through the relevant risk model, determining the amount of collateral to be allocated to, or released from the related product's order book.
The main advantage of this approach is to separate the product definition from the general protocol, allowing products to evolve within the marketplace. This approach will enable us to host almost any product or market imaginable.

Instruments

An instrument represents something that can be settled, it is a combination of a product and its satisfactory parameters. Instruments are the cornerstone of the market and the level at which markets are de-duplicated, but not tradable. A valid tradable instrument contains all the data necessary to execute transactions, calculate margins, and conduct settlements.

Markets

The market represents tradable instruments that have been configured for a specific trading method. The market can be proposed, active, suspended, or closed, depending on the position of the instrument in its life cycle. In addition to any risk management or governance actions that are currently affecting transactions.