Limit Order - Part 1

Limit Order based hook - how can we create a hook that behaves like a simple orderbook on chain and integrating is with uniswap

it is type of limit order where you can sell an asset at a price higher than its current price

if ETH is 3000 USDC,

a Take Profit order would be something like "sell 5 ETH of mine when ETH hits 3500 USDC"

ERC20 <> ERC20

Today : building the key functionality required for

• placing limit orders, mint ERC1155 token to show the position
• core logic for executing thise orders
• cancel orders
• withdraw / redeeem the output token that we get from executing order

After an order is placed

• When the price is right, how do we actually execute it? How dow we do this as a part of a hook?
• How do we know, if the price is right? figuring out when to execute the order
• How do we send/ let the user redeem their output tokens from their order

Say , Pool of of tokenA and B. TokenA => Token0 TokenB => Token1

Current tick of the pool is 500.

The types of take profit orders that can be placed

• Sell some amount of A as A gets more valuable than B
• Sell some amount of B as B gets more valuable (A dropping in value)

Case 1. Tick goes up even further, byond what it is right now (500)

Case 2. Tick goes down, below what is right now (500)

When there is change in tick value? Swap

• Alice place an order to sell some A for B when tick = 600
• Bob makes a swap on the pool to buy A for B, that will increase the tick. New tick is 700, say
• Inside the afterSwap hook function, we can see that tick just shifted from 500 to 700 due to Bob's swap
• Check if there are any TP order placed in the opp direction in the range that tick just shifted and we'll find Alice's order over there
• Now we can execute Alice's order as requirements are met.

Assumptions

• We are not really going to be concerned about gas costs/gas limit.

  • Bob is going to be the one paying the gas to execute Alice's order in this example.
  • We are not going to limit how many orders we execute before of a price shift

• We will ignore the slippage requirements for the placed limit order

  • When Alice places her order, ideally - she should set some sort of slippage ( some sort of minimum token B to get back )

• We'are not going to support pools that have native ETH token as one of the currencies. We only support ERC20-ERC20 pools.