Token vesting began on January 16th. Airdrop holders and private investors will have their first tokens be available for withdrawal when the protocol goes live on mainnet on February 6th, with the remainder of their holdings vesting linearly over a year.

A full breakdown can be found here.

At its core, an algorithm or "algo" is a general solution designed to address a specific problem. Consider a market-making strategy that utilizes spread in a distinct manner. An algo provides a framework that, when combined with specific parameters, transforms into a live trading strategy.

For example: the DCA (dollar cost averaging) algo. This algorithm allows for the integration of various asset types, DCA-ing frequencies, and tranche sizes. Once these parameters are defined, the algo becomes a live, actionable strategy.

We've streamlined the process of creating algos on Axo with our Composer. Each algo is meticulously compiled into a Cardano reference script and subsequently stored on the blockchain. This stored script, or contract, is then utilized when you initiate a strategy. Furthermore, this algo lays out a set of instructions that other strategies can leverage to align with it, ensuring fairness in execution.

What sets Axo apart is its revolutionary approach. Axo empowers users to craft and interact with intricate trading strategies without any hidden complexities. This transparent and powerful capability is the essence of the Axo protocol.

A strategy on Axo is formulated when an algorithm is combined with specific parameters and assets. It's a precise instantiation of an algorithm. For instance, if you choose to apply the DCA algorithm from ADA to AXO with a daily frequency and a tranche of 100 ADA, you're crafting a unique strategy.

Once you've defined your strategy and locked in your ADA, you can then mint this strategy to Axo. This minting process generates a new UTxO, of which you become the exclusive holder via the ownership token sent to your wallet.

It's crucial to safeguard this ownership token. Once your strategy has fully executed or you decide to cancel your strategy, all assets within that strategy will be returned to the wallet possessing the ownership token. This design not only ensures security but also offers flexibility. You have the option to transfer your strategies to different wallets, allowing you to trade them as you see fit.

In essence, Axo's approach to strategies is both innovative and user-centric, ensuring that traders have full control and transparency over their trading plans.

An order on Axo can be understood as a streamlined algorithm specifically designed for a single trading pair. This design facilitates a seamless connection with pair trading and charts, ensuring an intuitive trading experience.

Each of these order types is associated with a unique order book. This structure allows for easy and direct submission of orders through the trading interface, optimizing the user's trading process on Axo.

Algorithms are the basis for strategies - in order to create a strategy, you first need to have an algorithm. You can use or modify an existing algo or design your own from scratch.

Create or modify algos and strats via the Composer, a user-friendly tool that allows users to modify algorithms and set specific parameters through a simple drag and drop interface. This tool enables users to tailor algorithms to their needs, creating customized trading strategies.

Liquidity is provided to the exchange primarily through market making algorithms and limit orders. This means that only strategies that project into limit orders contribute to the liquidity pool.

Strategies that use market orders do not provide liquidity. For instance, the DCA (dollar cost averaging) strategy doesn't contribute to liquidity. Instead, it takes liquidity at every averaging interval as a market order.

To actively provide liquidity, ensure you select or create strategies that align with the aforementioned algorithms. By doing so, you'll be contributing to the exchange's liquidity pool and potentially earning rewards for your participation.

The easiest way to find a market making strategy is to go to the Markets page, click on your token of choice and you'll see the available strategies listed.

Market making on Axo revolves around ensuring liquidity and facilitating seamless trades. Market makers actively offer to buy and sell assets, bridging the gap between buyers and sellers.

Key components:

The spread: Market makers earn through the "spread", which is the difference between the bid price (the highest price a buyer is willing to pay) and the ask price (the lowest price a seller is willing to accept). By capitalizing on this spread, market makers can generate revenue.

Automated strategies: Axo offers a range of automated strategies tailored for market making. These strategies help in predicting asset price movements and gauging market momentum, allowing market makers to optimize their positions.

Customization: On Axo, market makers have the flexibility to choose from various algorithms or even modify them to align with their trading preferences. This customization ensures that market makers can provide liquidity in a manner that best suits their trading goals.

Liquidity provision: By continuously offering to buy and sell, market makers ensure that assets remain liquid on Axo. This continuous flow of trades helps in stabilizing prices and ensuring that traders can execute their trades without significant delays.

Market making on Axo is a dynamic process that requires a blend of strategy, understanding of market dynamics, and the right tools. By leveraging Axo's advanced features and algorithms, market makers can navigate the complexities of the market and contribute to a robust trading ecosystem.

An index on Axo is a strategic investment tool designed to adapt and evolve based on predefined criteria.

Strategy & rebalancing: An index on Axo operates based on a specific strategy that determines its composition. This strategy is not static; it undergoes periodic rebalancing as defined by the index's parameters. During each rebalancing period, the index composition is reevaluated to ensure it aligns with the set criteria.

Direct ownership: Unlike some traditional investment tools, when you invest in an Axo index, you directly own the underlying assets. This means you have genuine ownership of the tokens that make up the index.

Dynamic composition: Let's take an example of an index that tracks the top ten Cardano tokens by market cap. As the crypto market fluctuates, some tokens might fall out of the top ten, while others rise to join this elite group. The index strategy will automatically sell tokens that no longer meet the top ten criteria and purchase those that now do. This ensures that the index always reflects the top ten Cardano tokens by market cap.

Customization: Axo offers flexibility in index composition. Investors can define the weight of each token in the index, allowing them to tailor the index to their investment preferences and risk tolerance.

In summary, Axo indices provide a dynamic, customizable, and direct approach to cryptocurrency investment. By setting the index composition or inclusion criteria, investors can be assured that the strategy will consistently check and rebalance the index to align with their investment goals.

Credits are not fees. They are simply a reserve for executing programmable swaps. Think of credits as a battery that gets drained as it's used. Credits cover the nitty-gritty costs - matching instructions, Cardano transaction fees, oracle use, and all the other backstage magic that makes your financial dreams come true.

As soon as your order is completed, unused credits will be returned to you.

Credits are estimated based on statistical data computed from tests and user data. Credit estimates are expected to become more accurate as volume increases, and less extrapolation is necessary.

If you want to ensure that your strategy doesn't run out of credits, you can add more when creating it or add credits while it is running. You always get all the remaining credits back when you close your strategy or when it closes itself upon completion.

There are three primary components within the transaction fees on the Axo protocol:

• Cardano fees: Any settlement or transaction has to pay fees to the Cardano Blockchain.
• Axo fees: These are the costs associated with using systems related to the Axo protocol.
• Min ADA value: On Cardano, all non-native tokens have to have a certain amount of ADA attached to them to be moved. Min ADA value is returned to you when you close the order alongside all remaining credits.

Axo fee is the Axo protocol parameter and is currently set to 10 bps (0.1%). Axo fees are collected in ADA due to Cardano's min value requirements.

When strategies interact with other strategies value is exchanged. The value of this exchange is calculated using the asset spot price with ADA at the moment of exchange or the closest earlier time to the exchange. Axo fee is collected during the first swap and the residue is earmarked as excess fee. The next fee is only collected once the 0.1% fee threshold is exceeded again.

The process continues for 30 days at the end accumulating exactly 12 ADA in Axo fees.

It is important to note that the Axo protocol cannot collect more than 2 ADA during a single exchange. Due to how Cardano protocol is implemented, the Axo protocol also doesn't collect values less than 1.2 ADA.

Fees are collected in ADA as, due to Cardano's min value requirement when transferring tokens, it is more pragmatic to collect fees in ADA. Collecting fees in other assets leads to difficulties in collecting these fees - either the trader has to be overcharged or undercharged and the ideal fee is smooth and as incremental as possible.

The desirable goal of collecting fees in AXO is achieved by exchanging all collected fees in ADA for AXO via the Axo protocol and locking the accrued AXO in the venture treasury control by the community. This reduces the AXO circulating supply and allows the community to allocate it towards specific goals that it might deem worthy.

The “use recommended” credits button assesses the fees likely necessary to perform the strategy based on available information. Pressing the button will select the estimate of credits to fulfill the strategy.

It is not a precise number. The estimate contains a healthy margin as a buffer, so credits used are likely to be less than the recommended credits, but there may be cases where the recommended credits are insufficient.

If an algorithm is entirely new, as in no strategies have yet been deployed using it, then it's not possible to estimate fees. Estimates will be built according to data drawn from active usage. In such outlier scenarios, depositing a buffer of credits larger than is present in conventional strategies is recommended.

A good rough self-estimate is the amount of actions a strategy can take times 0.5 ADA (Axo matches require on average 0.3 ADA per strategy per transaction). For example, if you're creating a DCA over 30 days and matching daily, that's 30 actions, and this gives a rough estimate of 30 * 0.5 = 15. In reality, the number is much more likely to be 9 ADA, which you can select if you think the risk of the strategy stopping due to lack of funds is worth it. Alternatively, if you want to have higher certainty that your order is going to match you can include more, for instance 20 ADA instead of 15 ADA. You always get all the remaining credits back when you close your strategy or when it closes itself upon completion.

The Axo protocol implements two novel types of oracles:

Batchers were created to centralize access to AMM liquidity pools on Cardano. This was required for the development of AMM DEXs on Cardano as each UTxO can be reliably accessed only once. Without this serialization, AMM DEX protocols would be vulnerable to contention attacks and unable to process more than a single match per block.

The Axo protocol never faced this challenge as from the ground up it was designed to take full advantage of the decentralized nature of information in the Cardano blockchain in the form of UTxOs. Each strategy in Axo is contained in a separate UTxO, which means a match between strategies happens directly between a pair of UTxOs. This in turn means that they can be matched directly without any batching or batcher. There are only two things that can happen to UTxO under the Axo protocol - two strategy's UTxOs are matched against each other performing transactions, or the owner consumes the UTxO - collecting its content or altering its content (add assets, remove assets, add/remove execution credits).

Axo implements a novel mempool sharding solution allowing it to provide continuous matching in short succession. The moment a transaction is calculated (even before submission to the Cardano network) the exact address of the future UTxO is known. Thanks to the Axo network being able to share this information between its nodes, it is able to submit the next match using exactly the same UTxOs literal microseconds after the first match was proposed. This enables the execution of such time-dynamic strategies as 1 second DCA. The transactions still are going to take their time to settle on the Cardano blockchain, but the queue of transactions and proofs is already created inside the Axo network and awaiting submission. This takes full advantage of the scaling possibilities that the Cardano blockchain architecture provides. As a result, giving users close to instant matching experience with fast settlement (on average about 20-40s depending on the Cardano blockchain congestion).

If any of the transactions in the chain are rolled back, the Axo network rolls back the entire chain, which can be imagined as rolling back trading tape, and submitting matches under the proof of fairness in the state of the blockchain to which it was rolled forward.

AXO's prevention of MEV is rooted in its unique order processing system. Unlike traditional decentralized exchanges where individual orders are visible and can be manipulated, Axo deploys trading strategies as programmable swaps. This means the logic and conditions of the order are encoded directly, making it harder to exploit individual transaction details.

Furthermore, AXO's commitment to fairness is evident in its prioritization method as Axo adheres to a first-in-first-out (FIFO) system. This ensures that orders are processed in the sequence they are received, guaranteeing fairness of execution. By adhering strictly to FIFO, Axo ensures that no external party, including miners, can manipulate the order of transactions for their benefit.

By embedding strategy logic directly into orders and adhering to a strict FIFO execution system, AXO effectively mitigates the risks associated with MEV, ensuring a fair and transparent trading environment for its users.

Unlike traditional exchanges or bot trading systems, which typically wait for a signal and then send a limit order to the exchange, Axo operates on a unique mechanism. All trading strategies are deployed as programmable swaps on Axo. This means that the logic behind the strategy execution is embedded directly into the order itself. As a result, there's no need for external computer systems to submit limit orders to the exchange. Instead, Axo itself acts as the computational engine, interpreting and executing your trading strategies based on their predefined conditions.

This approach offers several advantages. For one, it helps in avoiding front-running, a common issue in traditional exchanges where traders can exploit the knowledge of pending orders. Since all orders and complex trading strategies are interpreted directly by the Axo Order Matching Engine, there's a reduced risk of such exploitative practices. Furthermore, this method ensures a more streamlined and efficient trading process, as there's no delay between signal detection and order placement. The direct execution of strategies also means that traders can implement more complex and nuanced strategies without worrying about external systems' limitations or potential errors.

Axo's approach to strategy execution not only simplifies the trading process but also enhances its security and efficiency, making it a revolutionary platform in the trading world.

An order book is a system commonly found in exchanges that displays buy and sell limit orders set by users. In this system, each user determines the specific amount they wish to buy or sell and at which price, resulting in the creation of distinct limit orders. This traditional method has its limitations, especially when compared to Axo's virtual order book (VOB). The VOB takes all deployed programmable swaps and automatically calculates their positions in the order book. This means users can deploy advanced market-making strategies, and Axo will determine their place in the order book seamlessly. This approach offers a significant advancement over the conventional order book design.

On the other hand, automated market maker (AMM) DEXs don't provide a visual representation of liquidity distribution across the order book. This lack of visibility makes it challenging for users to place strategic orders based on available liquidity. As a result, AMM DEXs often experience high slippage, and sometimes orders don't get filled. In an AMM DEX, an order must be fully executed; partial matches aren't possible because there's no order book to accommodate the remaining liquidity. In contrast, the Axo VOB allows for partial matches, ensuring more flexibility and efficiency in order execution.

An AMM (automated market maker) DEX locks all liquidity in one smart contract and when a trader wants to exchange funds it calculates the price using a specific formula. This leads to only a fraction of liquidity being used in matching, loss to slippage, and an inefficient market making process.

Axo utilizes a virtual order book model. All strategies are projected into the order book at any point in time. This means the liquidity can be located exactly where it needs to be, resulting in very low slippage due to the natural liquidity concentration and appropriate pricing of liquidity risk by the market. This combines the traditional CEX efficiency and convenience with decentralized fund security and transactional transparency.

Partial matching solves two fundamental problems:

• Coincidence of wants - it is very unlikely two traders will want to exchange perfectly matching quantities. Partial matching ensures that regardless of order sizes, orders can always be matched against their best counterparty.
• No missed trading opportunities - the full available extent of an order is always matched, meaning you never lose on any trading opportunities.

The goal of the testnet is foremost to provide testing data based on realistic usage of the protocol at scale. The protocol on testnet at the initial (pre-mainnet launch phase) is going to be run in a specific way:

• Market will be irrational. All people using the testnet are going to have access to tokens with no value that are minted for free. This means that trade won't be rational and interesting things are going to happen that would normally not happen in the regular market, driving the real market value. For instance, prices of DJED / token X and ADA / token X can diverge significantly more than a simple exchange ratio of DJED to ADA since there is no profit from arbitraging this pair.
• Throughput of the Axo network can be limited to be able to observe better proofs generated by the Axo protocol (reduce the amount of noise).
• A new version of the Axo network can be forked, potentially in a backward incompatible fashion (this is only expected if major changes need to be rolled out as a result of testnet findings). This could be as minor as a little downtime, or in the most extreme case it could require a fresh rollout of the network.
• Some features have not yet been rolled out yet, such as strategy backtesting and some features are not in their final form.
• Not all algos will be listed at once. The goal of the testnet is to gather as high-quality feedback as possible. One of the effects of this is a decision to start rolling out from simpler algos and adding new and more complex algo categories over the course of the testnet. All users will be able to create any algo they can think of using xlang. However, the protocol algo bundle is going to be released in tranches to observe their impact on the protocol.
• Some bugs will be found - this is the goal of the testnet.