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Centralized Exchange POC

This is the minimalistic POC project that tries to show how CEX operates. Currently supports ETH and ERC20 token deposits.

Prerequisites

  • Redis - used for storing generated wallets and new deposits
  • Node.js > 16.0.0
  • env variables

Run

NOTE: This was mostly tested with testnets, Ropsten and Kovan. So, for the best performance test in this networks.
Before running the services, make sure your redis-server is up. Also make sure you have installed all the dependencies:

yarn

Launch API:

yarn run start-api

In a separate terminal, launch watcher service:

yarn run start-watch

To run tests:

yarn run test

docker-compose

Docker compose spawns all the necessary services with one command:

docker-compose up

Example

  1. First, take any random integer user id and get a deposit address (see below).
  2. Then deposit some ether (on Ropsten) to the following address. After the transaction is confirmed, it should send a webhook.
  3. Get deposit transaction hash from the webhook url.
  4. Move funds to a cold wallet (see below)

Hierarchical Deterministic (HD) Wallets

In a traditional CEX when user wants to deposit ETH or ERC20 tokens, a unique deposit address is created. User deposits the funds and CEX detects the deposit and updates it's records. There are essentially three ways to accomplish this:

  • Generate new keypair for each user

    • Need to maintain huge number of keypairs
    • Hard to move funds for large number of wallets

  • HD wallets

    • One private key/mnemonic to manage all derived keypairs
    • Deterministic
    • Single point of failure

  • Generate forwarding smart contracts for each user

    • High gas fees for contract deployment
    • Single transaction

This project uses HD wallets to manage user deposit addresses, where for each user the deposit address is derived from the userId.

Watcher Service

This is the monitoring service that tracks incoming transactions to our generated deposit addresses.

It essentially subscribes to newBlockHeaders event and whenever the new block is produced, iterates over block transactions to process them. It creates a webhook if the valid deposit has been made.

For each block, this service also fetches EVM logs, filtering them by Transfer event topic. If the valid deposit of ERC20 tokens has been made, it creates a new webhook with ERC20 token type deposit.

Webhook

When the new deposit is detected, Watcher service sends the transaction metadata to the given webhook url. This, obviously can be modified based on your needs, f.e you could send an email, or push notification, etc. In this case, I send a tx metadata to a mock api url. All the posted deposits can be retrieved from this url. For example, we can use the deposit transaction hash to move deposit to a cold wallet.

API Endpoints

Get a deposit address for User

Request

GET /wallet/:userId

curl -X GET http://localhost:3000/wallet/69 -H 'content-type: application/json'

Response

{
    "wallet": "0x9676485902c3de2ce6fbb16297fca512bc929111"
}

Move deposited amount from Wallet by Tx Hash

Request

POST/wallet/:userId/move

curl -X POST \
  http://localhost:3000/wallet/99/move -H 'content-type: application/json' \
  -d '{
	"txHash": "0x890594983bc5b58b1a32dd121eda492c6b31f830ba6ae1205401b14ab7ccc860"
}'

Response

{
    "result": {
        "tx_hash": "0xcd42b944659b72db8e6d1ebf25d6a85bace4c0c7f75b13122fff9d2ee554e4f5",
        "status": true,
        "gasUsed": 1416354,
        "from": "0xfb987d56d1e554f4f226f4b9bef881dbb377c25e",
        "to": "0xc096bda87833db5976390c85e8566f88869212e3"
    }
}