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System roles overview
The main participants in the Kinetex protocol are the following four categories: Users, Resolvers, Protocol Maintainers, and Liquidators.
Users can make cross-chain swaps just by providing approval for their assets. There are no gas fees for the transactions and no hidden fees from protocol. Users of the Kinetex protocol receive the best possible rates from Resolvers, while Resolvers compete to provide the best swap rate and duration.
Resolvers are the key players in the Flash Trade protocol. Resolvers are supposed to be professional market players. They set the rates, hold the liquidity for executing orders, and provide collateral to ensure the security and timely execution of the orders. Resolvers must analyze the market, build their trading strategies, hold liquidity between networks, be able to rebalance liquidity, manage their collateral, prevent attacks, and have their own risk management strategy. Each Resolver is responsible for its own liquidity and should set rates only after a thorough risk analysis.
Protocol Maintainers maintain the protocol and constantly update the state of the Zk-LightClients (contracts that store the state of a blockchain) of the networks where Resolvers perform transactions. By having the current state of the blockchain stored in the Zk-LightClient contract, Resolvers can validate and confirm their transactions. Anyone with sufficient computing power and tokens staked in Kinetex DAO can become a Protocol Maintainer. DAO staking is mandatory because the amount of staked tokens will affect the consensus, the number of proof generations executed by this node, and the share of fees charged to Resolvers and other users of the protocol. These fees can be used to increase the stake in the DAO or withdrawn without any restrictions. In addition, a Protocol Maintainer can be penalized with a stake in the DAO in case of the inability to generate a proof or an attempt to attack the system trying to appropriate more rewards than they should.
Liquidators ensure that the whole system works fairly for Users and that all transactions are completed on time. If a Resolver takes a user's funds but fails to execute an order, their collateral will be liquidated. If a Liquidator finds a transaction that the Resolver did not complete on time, they can finish it for a reward. The Liquidator needs to transfer the desired assets to the user and provide a proof of a transaction to be able to unlock the Resolver's collateral. The liquidation process is described on the Liquidation page.