🌐Overview

Introduction

Stella Trade is a Perpetuals Trading Platform that offers the best perps execution across CeFi and DeFi. Stella Trade utilizes an innovative hybrid trading system that blends the traditional CLOB model with the power of intent-based Just-In-Time (JIT) liquidity — and thus facilitates an efficient, robust, self-custodial trading environment.

Stella Trade leverages a hybrid model combining both on-chain and off-chain elements. This architecture ensures secure asset custody on-chain while delivering deep liquidity through third-party market makers. The system offers the advantages of decentralized platforms, such as transparency and non-custodial asset management, while maintaining competitive pricing typically associated with centralized exchanges.

The protocol leverages Just-in-Time (JIT) liquidity provisioning, where market makers supply liquidity in response to users' trading intents, significantly improving capital efficiency. This approach departs from conventional order book or automated market-making (AMM) models, where liquidity must be pre-committed.

What makes Stella Trade truly game-changing is its ability to tap into CEX-level liquidity while maintaining on-chain operations. This integration allows users to access the deep liquidity pools of centralized exchanges, which vastly exceed what's currently available on-chain. For traders, this means better price execution, less slippage, and a more seamless trading experience without compromising on the self-custodial benefits of DeFi.

This documentation provides comprehensive technical guidance for developers, market makers, and DeFi participants. Whether you’re integrating Stella Trade, providing liquidity, or exploring the protocol, you’ll find everything you need here.

Key features:

• Hybrid architecture Stella Trade protocol combines off-chain components and on-chain smart contracts for deep liquidity and strong security guarantees.

• Cross Margin engine A position’s profit offsets another position’s loss within the same sub-account. Capital efficiency is maximized for the end user.

• Just-in-Time (JIT) Liquidity Market makers supply liquidity on demand when a user's trading intent is triggered, even if that capital is reserved for limit orders, maximizing capital efficiency.

• Infrastructure layer for Market Makers A clearing layer for decentralized perpetual futures. Third-party applications can plug into Stella Trade to access its network of market makers and offer the best service to their users.

• Permissionless platform There are no KYC or account restrictions. Users retain control over their assets.

Problem statement and Stella Trade’s vision

The decentralized finance space has made significant strides in the past few years. However, decentralized perpetual futures trading still struggles to offer the same level of performance that centralized exchanges provide. For professional traders, institutions, and high-frequency traders, existing DeFi platforms remain unattractive due to several fundamental limitations. High transaction fees, slow execution speeds, and fragmented liquidity make it challenging to replicate the efficiency of CEXs. These issues raise costs for traders and limit the scalability of on-chain perpetual futures.

Challenges in current models

Orderbook-based models

Order books are a fundamental component of TradFi, and there’s a reason for it. They provide precise liquidity control and enable efficient capital management. However, fully on-chain implementations face significant constraints:

• Throughput Limitations: The latency of public blockchains restricts transaction throughput, making it impossible to reach the CEX’s speed.

• Liquidity Fragmentation: High liquidity depth on decentralized markets remains challenging, particularly for less popular trading pairs.

• Capital Inefficiency: Order book models demand committed capital for limit orders, which imposes opportunity costs and hinders capital flexibility, especially in DeFi.

Intent-Based Models

Intent-based models shift away from traditional order books by focusing on user trade intents, enabling on-demand liquidity. While this simplifies trading and reduces order management overhead, it introduces new challenges:

• Solver dependency: Users can only trade against market makers, leading to a reliance on MMs availability and uptime. This rigidity can disrupt markets during low participation periods.

• Capital Lock-Ups: Each trade demands isolated margin allocation, which prevents traders from optimizing their capital across multiple positions. Unlike net margin systems, where positions can offset one another, this approach leads to fragmented capital usage and reduced overall efficiency.

Our vision

At Stella Trade, we envision a decentralized trading ecosystem that bridges the gap between the performance of centralized exchanges and the security and self-custodial features of DeFi. Our mission is to create a platform that combines on-chain security with off-chain efficiency, allowing professional traders, institutions, and retail users to operate with confidence just as they would on a traditional CEX, but without the inherent risks of centralized custodial platforms.

Stella Trade’s architecture combines the strengths of intent-based models and CLOB frameworks to redefine decentralized perpetual futures trading. The protocol integrates:

• Just-In-Time (JIT) Liquidity Engine: By sourcing liquidity on demand, Stella Trade allows the market makers to move capital around at the moment of user's incoming trade (so you can move your limit orders temporarily to concentrate it to counter the user's order), addressing a key capital inefficiency in DeFi.

• A Central Limit Order Book (CLOB) Foundation: At the protocol's core lies an off-chain CLOB design that allows for efficient margin management and dynamic role flexibility, bridging the gap between centralized and decentralized trading experiences.

Stella Trade aims to create a seamless, scalable trading ecosystem that pushes the boundaries of DeFi, driving wider adoption and deeper integration into global financial markets. By blending cutting-edge architecture with robust market functionality, Stella Trade sets a new standard for decentralized trading.