UTXO DAG Description

The history of the entire ledger representing balances collateralized on a Participating Interface can be represented as a direct acyclic graph with the following properties:

• every node is either a UTXO or a TraderIntent

  • a UTXO represents the state of an entry in the ledger

  • a TraderIntent represents an action initiated by the owner of the ledger entry

• a TraderIntent can only have vertices that connect to a UTXO

• a UTXO must have 1 input vertices and 0 or 1 output vertices

• a TraderIntent must have 0 or more input vertices and 1 or more output vertices

• a Deposit:

  • is a TraderIntent that has no input vertices and 1 output vertex

  • must output a DepositUTXO

• a DepositUTXO:

  • has 1 input and 0 or 1 outputs

  • is a UTXO that represents a digital asset first entering the ledger of a PI through an AssetCustody contract

  • every UTXO either is a DepositUTXO or is a descendant of a DepositUTXO (meaning if you follow the inputs of any UTXO, you will eventually reach a DepositUTXO)

  • no descendant of a UTXO can be a DepositUTXO

• a Trade:

  • represents a PI matching two trader-signed orders and including them in the ledger

  • is a TraderIntent that has at least 2 input vertices and 4 output vertices:

    • each input must be either a DepositUTXO or an ObligationUTXO

    • each output must be either an ObligationUTXO or a FeeUTXO

  • swaps ownership of UTXOs between two traders, creating the new ledger entries as well as entries for any fees paid

• a ObligationUTXO:

  • has 1 input and 0 or 1 outputs

  • is a UTXO that represents a ledger entry in the PI that is "out-of-sync" with the AssetCustody contract. It will either continue to be transferred on the ledger as a result of a Trade, or it will become a SettledUTXO

• a FeeUTXO:

  • has 1 input and 0 outputs

  • is a UTXO that represents a fee paid by a trader