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+# DEX
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+
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+With cross-chain bridging and darkpool DEX then DarkFi would be a very
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+attractive trading tool.
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+
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+We currently have OTC swaps which are an efficient way to settle trades
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+on-chain. But there needs to be an orderbook for matching counterparties.
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+
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+We propose that this job can be performed by an order-matching bot which
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+maintains an orderbook. Later this role can be split with MPC.
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+
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+The order-matching party needs to be able to construct the swap trade,
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+even when the LP is offline.
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+
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+We propose to do this using the spend hook and a special `auth_otc` function.
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+The `auth_otc` basically says:
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+
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+* The sender of the funds has the right at any time to withdraw liquidity and
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+ cancel the LP.
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+* The funds are delegated to the order-matching party but with restrictions:
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+ * Can only make an OTC swap tx using the funds.
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+ * The trade parameters are completely specified such as the price and
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+ currencies.
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+
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+The funds are therefore delegated to the order-matching party, who finds
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+counterparty offers and executes the trades settling them on-chain. Both parties
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+receive their funds in a trustless anonymous manner. At any time the LP can be
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+canceled and funds withdrawn.
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+
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darkfi