Smart Contract Interactions

Overview

Fox Market uses a hybrid-decentralized architecture that combines off-chain order matching (CLOB) with on-chain settlement. This design provides the speed and efficiency of centralized exchanges while maintaining the security and non-custodial nature of decentralized systems.

Architecture Components

Core Smart Contracts

1. CTFExchange (Main Trading Contract)

Based on Polymarket’s CTF Exchange, this is the primary contract for executing trades. Key Features:

Atomic Swaps: Facilitates atomic swaps between ERC1155 outcome tokens and ERC20 collateral
Hybrid Model: Off-chain matching with on-chain settlement
EIP-712 Signatures: Secure order signing and verification
Multiple Signature Types: EOA, POLY_PROXY, POLY_GNOSIS_SAFE
Fee Management: Symmetric fee collection and distribution

Core Functions:

// Order execution
function fillOrder(Order memory order, uint256 fillAmount) external
function fillOrders(Order[] memory orders, uint256[] memory fillAmounts) external
function matchOrders(Order memory takerOrder, Order[] memory makerOrders, ...) external

// Configuration
function setProxyFactory(address _newProxyFactory) external
function registerToken(uint256 token, uint256 complement, bytes32 conditionId) external

2. ProxyWalletFactory (User Wallet Management)

Factory contract for creating deterministic proxy wallets for users. Key Features:

Deterministic Deployment: Same address for same user across networks
Gas Optimization: Minimal proxy pattern for efficient deployment
User Management: Centralized wallet creation and tracking

Core Functions:

function createProxyWallet(address user) external returns (address wallet)
function getProxyWallet(address user) external view returns (address)
function isProxyWalletAddress(address wallet) external view returns (bool)

3. MockUSDC (Collateral Token)

Test implementation of USDC for development and testing. Key Features:

ERC-20 Standard: Compatible with existing DeFi infrastructure
Minting Capability: For testing and development
6 Decimals: Matches real USDC precision

4. Market (Token Management)

Comprehensive contract for managing prediction market tokens (ERC-1155). Key Features:

Market Creation: Dynamic market setup with multiple outcomes
Token Management: ERC-1155 token minting and burning
Outcome Resolution: Automated settlement based on oracle data

Integration with CLOB System

Data Flow

Order Processing

1. Order Creation (Off-chain)

// User creates order with EIP-712 signature
const order = {
    salt: generateRandomSalt(),
    maker: userAddress,
    signer: userAddress,
    taker: address(0), // Public order
    tokenId: outcomeTokenId,
    makerAmount: 1000, // USDC amount
    takerAmount: 500,  // Token amount
    expiration: block.timestamp + 3600,
    nonce: userNonce,
    feeRateBps: 30, // 0.3%
    side: Side.BUY,
    signatureType: SignatureType.POLY_PROXY
};

2. Order Matching (CLOB)

# CLOB matches orders based on price-time priority
matched_orders = clob_service.match_orders(buy_orders, sell_orders)

3. Order Execution (On-chain)

// CTFExchange executes matched orders atomically
ctfExchange.matchOrders(
    takerOrder,
    makerOrders,
    takerFillAmount,
    makerFillAmounts
);

Signature Verification

The system supports three signature types:

1. EOA (Externally Owned Account)

function verifyEOASignature(address signer, address maker, bytes32 structHash, bytes memory signature)
    internal pure returns (bool)
{
    return (signer == maker) && verifyECDSASignature(signer, structHash, signature);
}

2. POLY_PROXY (Proxy Wallet)

function verifyPolyProxySignature(address signer, address proxyWallet, bytes32 structHash, bytes memory signature)
    internal view returns (bool)
{
    return verifyECDSASignature(signer, structHash, signature) && 
           getPolyProxyWalletAddress(signer) == proxyWallet;
}

3. POLY_GNOSIS_SAFE (Gnosis Safe)

function verifyPolySafeSignature(address signer, address safeAddress, bytes32 hash, bytes memory signature)
    internal view returns (bool)
{
    return verifyECDSASignature(signer, hash, signature) && 
           getSafeAddress(signer) == safeAddress;
}

Contract Architecture: CTF-Based Design

Why CTF Exchange Architecture?

The Fox Market system adopts Polymarket’s CTF Exchange architecture for several key reasons:

1. Proven Security Model

Audited Contracts: CTF Exchange has been audited by ChainSecurity
Battle-Tested: Used in production by Polymarket
Best Practices: Implements industry-standard security patterns

2. Hybrid Decentralization

Off-chain Matching: Fast order matching via CLOB
On-chain Settlement: Secure, non-custodial settlement
Operator Model: Centralized efficiency with decentralized security

3. Flexible Signature System

Multiple Wallet Types: EOA, Proxy Wallet, Gnosis Safe
Deterministic Addresses: Same proxy wallet address across networks
Gas Optimization: Minimal proxy pattern for efficient deployment

Current Design: CTF-Based Architecture

Pros of CTF Architecture

1. Proven Security

Audited by ChainSecurity
Used in production by Polymarket
Implements industry best practices

2. Hybrid Efficiency

Fast off-chain matching
Secure on-chain settlement
Best of both worlds

3. Flexible Wallet Support

Multiple signature types
Deterministic proxy wallets
Gas-optimized deployment

4. Standard Compliance

EIP-712 signature standard
ERC-1155 token standard
ERC-20 collateral standard

5. Scalable Architecture

Modular design with mixins
Easy to extend and customize
Clear separation of concerns

Cons of CTF Architecture

1. Complexity

More contracts to manage
Steeper learning curve
More complex deployment

2. Gas Costs

Multiple contract interactions
Proxy wallet deployment costs
Cross-contract calls

3. Dependency on External

Relies on Polymarket’s architecture
Limited customization options
Potential version lock-in

Alternative: Simplified Architecture

Pros of Simplified Design

1. Easier to Understand

Single contract for trading
Simpler deployment process
Clearer codebase

2. Lower Gas Costs

Fewer contract interactions
No proxy wallet overhead
Direct token transfers

3. Full Control

Complete customization
No external dependencies
Independent development

Cons of Simplified Design

1. Security Risks

Untested architecture
Potential vulnerabilities
No audit history

2. Limited Features

Basic functionality only
No advanced wallet support
Limited signature types

3. Scalability Issues

Harder to extend
Monolithic design
Difficult to upgrade

Recommendation: CTF-Based Architecture

For the Fox Market system, we recommend adopting the CTF-based architecture because:

1. Production Readiness

Proven in production by Polymarket
Comprehensive security audit
Battle-tested codebase

2. Advanced Features

Multiple wallet support
Deterministic addresses
Flexible signature system

3. Industry Standards

EIP-712 compliance
ERC-1155 token support
Hybrid decentralization

4. Future Flexibility

Modular design
Easy to extend
Scalable architecture

Integration Strategy

Phase 1: Core Integration

Deploy CTFExchange with our customizations
Implement ProxyWalletFactory for user management
Create MockUSDC for testing
Integrate with CLOB for order matching

Phase 2: Advanced Features

Add Market contract for token management
Implement Oracle integration for outcome resolution
Add advanced fee management
Implement batch operations

Phase 3: Optimization

Gas optimization for common operations
Batch processing for multiple orders
Advanced order types (stop-loss, etc.)
Cross-chain compatibility

Security Considerations

1. Signature Verification

All orders must be properly signed
Multiple signature types supported
Deterministic address verification

2. Reentrancy Protection

All external calls protected
State changes before external calls
Comprehensive testing

3. Access Control

Admin-only functions protected
Proper role management
Emergency pause functionality

4. Gas Optimization

Efficient proxy wallet deployment
Minimal cross-contract calls
Optimized data structures

Testing Strategy

1. Unit Tests

Individual contract functions
Signature verification
Access control

2. Integration Tests

End-to-end order flow
CLOB integration
Cross-contract interactions

3. Security Tests

Reentrancy attacks
Signature forgery
Access control bypass

4. Gas Tests

Deployment costs
Operation costs
Optimization verification

Bottom Line

The CTF-based architecture provides a robust, secure, and scalable foundation for Fox Market. While it introduces some complexity, the benefits of proven security, advanced features, and industry standards outweigh the costs. The hybrid approach of off-chain matching with on-chain settlement provides the best user experience while maintaining decentralization.

Getting Started

Platform Features

Advanced Topics

API Reference

Technical

Wallets & Security

​Smart Contract Interactions

​Overview

​Architecture Components

​Core Smart Contracts

​1. CTFExchange (Main Trading Contract)

​2. ProxyWalletFactory (User Wallet Management)

​3. MockUSDC (Collateral Token)

​4. Market (Token Management)

​Integration with CLOB System

​Data Flow

​Order Processing

​1. Order Creation (Off-chain)

​2. Order Matching (CLOB)

​3. Order Execution (On-chain)

​Signature Verification

​1. EOA (Externally Owned Account)

​2. POLY_PROXY (Proxy Wallet)

​3. POLY_GNOSIS_SAFE (Gnosis Safe)

​Contract Architecture: CTF-Based Design

​Why CTF Exchange Architecture?

​1. Proven Security Model

​2. Hybrid Decentralization

​3. Flexible Signature System

​Current Design: CTF-Based Architecture

​Pros of CTF Architecture