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Flash Trade Security

The Flash Trade system uses several components to ensure the network’s security and efficient operation:
  1. 1.
    Zero-Knowledge Proofs (ZK): This cryptographic method allows one party to prove to another that a statement is true without revealing any additional information beyond the truth of the statement itself. In the context of Flash Trade, Zk proofs are used to verify token transfers between different chains, providing a full guarantee of the proof validity. Zk proofs are also used by Liquidators when resolvers fail to complete orders. After filling orders instead of Resolvers, Liquidators show the proofs to be able to take the Resolvers’ collaterals.
  2. 2.
    Resolver Collateral: Resolvers must provide collateral to fill orders instantly and without delays. This mechanism allows for safe peer-to-peer transfers from Users to Resolvers. If a Resolver fails to fulfill an order, the User can claim their collateral as a refund, which ensures that user assets are always protected.
  3. 3.
    Liquidators: Liquidators play a critical role in the security of Flash Trade. They are responsible for filling (or refunding) orders that Resolvers have failed to fill, ensuring that Users are not left fundless.
  4. 4.
    Zk Light Clients: These on-chain entities are constantly updated by Protocol Maintainers, forming a decentralized network. The correct operation of this network is guaranteed by the stake put up by the participants. If a Protocol Maintainer fails to provide a proof and update the Zk light client, their stake can be slashed, ensuring honesty and integrity within the system.