Bitcoin Rune Dex Backend

A TypeScript-based implementation of a decentralized exchange (DEX) for Bitcoin Rune tokens. This project provides essential DeFi features like swapping, AMM (Automated Market Making), liquidity provision, and yield farming, all built on the Bitcoin network using the Rune protocol.

Core Features

Token Operations

• 🔄 Advanced Token Swapping with Multi-hop Routing
• 💧 Liquidity Pool Management
• 🌾 Yield Farming
• 📊 Real-time Price Feeds
• ⚙️ Automated Market Making (AMM)
• ⛽ Gas-optimized Operations
• 📬 Multi-token Distribution System

DeFi Functionality

• 💱 Direct Token Swaps with Price Impact Calculation
• 🛡️ Slippage Protection
• 💰 Fee Collection and Distribution
• 📈 APY Calculation and Tracking
• 🏊‍♂️ Pool Creation and Management
• 🎯 Impermanent Loss Protection

Prerequisites

• Node.js (v14 or higher)
• MongoDB
• TypeScript
• Web3 Provider (e.g., Mempool)
• Compatible Wallets:
  • Unisat
  • XVerse
  • Phantom
  • MagicEden
  • OKX

Technical Architecture

Token Swapping System

• Multi-hop routing for optimal swap paths
• Price impact calculation engine
• Slippage protection mechanisms
• UTXO management system

Liquidity Pool Management

• Pool creation and initialization
• Liquidity provision tracking
• Fee collection and distribution
• Emergency stop mechanisms

Yield Farming

• Farm creation and management
• Automated reward distribution
• Staking mechanism implementation
• Real-time APY calculations

Critical Issues & Solutions

1. UTXO Management

Problem: Users face difficulties with spent UTXO tokens during swaps

Solutions:

1. UTXO Splitting Strategy
   • Split tokens into multiple UTXOs
   • Pros: Avoids UTXO spent problems
   • Cons: Higher transaction fees
2. Spent UTXO Reference System
   • Enables usage of spent UTXOs
   • Limited to 24 swaps per block
   • More cost-effective solution

2. Multi-User Token Distribution

Problem: OP_RETURN size limits multi-user token distribution

Solution: Recursive Distribution Algorithm

• Maximum 9 users per transaction (OP_RETURN size limit)
• Implements recursive algorithm for larger distributions
• Integrates with spent UTXO reference system
• Optimized for gas efficiency

3. High Concurrency Management

Problem: System struggles with high-volume requests (100+ per second)

Solution: LavinMQ Implementation

• Queue-based request handling
• Sequential processing
• Improved system stability
• Better resource management

Security Features

Transaction Security

• Price oracle integration
• Flash loan attack protection
• Reentrancy guards
• Rate limiting

Pool Security

• Liquidity locks
• Emergency circuit breakers
• Role-based access control
• Real-time monitoring

Monitoring & Analytics

Pool Metrics

• Real-time liquidity tracking
• Price monitoring
• Volume analysis
• Fee collection statistics

Performance Tracking

• APY calculations
• User activity metrics
• Gas optimization analysis
• Error monitoring and logging

Development

# Install dependencies
npm install

# Start development server
npm run dev

# Build for production
npm run build

# Start production server
npm start

Environment Configuration

Create a .env file:

PORT=6000
MONGO_URI=your_mongodb_connection_string
MEMPOOL_API_KEY=your_mempool_api_key
MAX_REQUESTS_PER_SECOND=100
LAVINMQ_URL=your_lavinmq_url

Contributing

1. Fork the repository
2. Create your feature branch (git checkout -b feature/amazing-feature)
3. Commit your changes (git commit -m 'Add some amazing feature')
4. Push to the branch (git push origin feature/amazing-feature)
5. Open a Pull Request