Smart Order Router (SOR)

Overview: The Smart Order Router (SOR) at Ranger Finance is a sophisticated system designed to optimize trade execution by systematically evaluating available liquidity across multiple platforms and minimizing price impact, slippage, and trading fees. This system dynamically adjusts to real-time market conditions, ensuring that trades are executed at the most favorable prices.

Benefits: SOR ensures that trades are executed at the most favorable prices available, saving costs for traders and increasing the efficiency of the trade execution process. It dynamically adjusts to real-time market conditions, providing resilience against market volatility.

How the SOR Works

1. Order Placement

   • Users initiate trades which triggers the SOR.

   • The SOR analyzes order parameters and current market conditions to determine an initial routing strategy.

2. Liquidity Assessment

   • It evaluates the liquidity available across integrated platforms considering factors such as order size, current prices, transaction fees, and platform reliability.

3. Execution Strategy

   • The SOR determines optimal order splitting and selects the best execution paths based on available liquidity.

   • It calculates the timing and sequencing of trades to optimize execution.

4. Order Execution

   • The order is routed in portions to selected platforms, managing any necessary token swaps (e.g., from USDC to the target asset).

   • Execution is monitored in real-time to ensure efficiency.

5. Trade Confirmation

   • Once executed, the results are consolidated.

   • The system provides a unified trade confirmation and updates the user's position accordingly.

Supported Operations

• Position Management: Users can increase, decrease, or close their positions (partially or fully).

• Collateral Handling: Supports native tokens and USDC collateral, with automatic conversions when necessary.

Dynamic Adaptation and Failover Mechanisms

• Real-Time Monitoring: Continuous assessment of market conditions and liquidity status.

• Failover Mechanisms: Incorporates backup liquidity sources and alternative routing paths for enhanced reliability.

Benefits for Traders

• Better Pricing: Access to multiple liquidity sources ensures reduced trading costs and optimized execution paths.

• Enhanced Execution: Achieves faster fill speeds, higher fill rates, and reduced slippage.

• Improved Reliability: Utilizes redundant execution paths and platform-level failover to maintain consistent performance.

Technical Implementation

• Architecture Components:

  • Price Aggregator: Utilizes real-time price feeds and cross-platform price normalization.

  • Risk Engine: Predicts slippage and makes risk-adjusted routing decisions.

  • Optimization Engine: Employs order splitting algorithms and execution path optimization to minimize costs.

Coming Soon: API Integration

• RESTful API endpoints will soon be available to enhance functionality and integration capabilities.