democratizing defi derivatives

The problem LiquidationStation solves

Much of the contemporary defi protocols depend on bot operators to perform various tasks in order to ensure that actions get taken when required. The operators are incentivized by the reward they receive, however, the environment is extremely competitive which inevitably leads to scenarios where only those most skilled and well equiped can participate. Not only does this lead to centralization which diminishes fault tolerance, the software that these operators run is often a black box to those whose protocols rely on it. We take the opposite approach in our multi-agent application, where we incentivize collaboration by securing off chain computation using Tendermint. Doing so all state transitions during off chain computation require consensus. After a complete iteration the final transactions to liquidate are submitted on-chain (polygon mainnet). The agents share a Gnosis multisig wallet and the rewards are distributed evenly, where operators that perform better get rewarded more, and those that do not contribute can be removed from the set of active participants if so decided by majority consensus, in order to allow the system to be purged from parasites that will inevitably arise.

Challenges we ran into

The smart contracts took a considerable amount of time to understand, as documentation was lacking and certain functionalities were exposed on contracts where they did not provide meaningful output. We also found that polygon does not allow for filtering of event data, something which ethereum does, which was a rather unexpected last minute surprise. All in all, it turned out to be as challenging of a hackaton as always, a lot of fun and a healthy(?) dose of stress at the end.