Denaria Behind the Scenes: Product Update

Transparency is key to what we’re building at Denaria and today, for the first time, we’re sharing what’s been happening behind the scenes of Denaria’s development, from core protocol mechanics to UI improvements and DAO infrastructure.

This is the first of many updates where we’ll bring the community closer to the engineering process powering our perpetual DEX. Here’s a glimpse into what we’re working on right now:

Smart Contract Audits

Security comes first. Always.

In the past month we’ve already completed an initial audit of our core smart contracts in collaboration with a tier one auditing firm and, since then, our dev team has been refining the codebase and implementing significant improvements across the board.

A second round of audits is scheduled for this summer, ensuring every line of code is thoroughly tested before we hit mainnet.

Given the complexity of our dynAMM engine and the novel mechanisms we’re building, this second audit is not just a precaution, it’s essential for delivering a more stable, secure, and resilient codebase.

Liquidator: Permissionless SDK

Liquidations are one of the most sensitive pieces of any perpetual DEX and at Denaria, we’re pushing towards a more distributed and open solution.

We’re currently building a liquidation toolkit that will allow anyone to participate in the liquidation process and earn rewards.

This means no individual actors, no hidden processes, just open infrastructure securing the protocol.

Simulation Campaigns with Python

Before releasing our dynAMM, we need to understand how it performs across all types of market conditions, from highly bullish to consistently bearish.

We’ve kicked off internal simulation campaigns in Python to stress-test the model, tune key parameters (like funding rate, slippage, fees), and optimize the stability of the system.

The goal: make dynAMM as efficient and resilient as possible, delivering optimal trading conditions no matter the market.

Account Abstraction and Recovery System

We’ve partnered with ZeroDev to bring Account Abstraction to Denaria, enabling smart wallets, passkeys, and a seamless trading UX.

But we’re going even further.

We’re building a first-of-its-kind peer-to-peer social recovery system that lets users assign a backup wallet to recover funds in case of lost access. No more seed phrase anxiety. Just smooth, secure DeFi.

Liquidity Providers Front End

Our vision of a fully onchain perpetual DEX includes one key pillar: permissionless liquidity provisioning.

Denaria will allow anyone to deposit liquidity, act as a counterparty to traders, and earn trading fees.

We’re building a powerful, flexible front end for LPs. Here’s an early look at what’s coming:

• Deposit assets in customizable ratios

• Choose leverage on their liquidity positions

• Provide liquidity within specific price ranges

Codebase Upgrades for Linea’s Upcoming Changes

Linea is planning significant upgrades to its chain in the coming months, which will require our smart contracts to be updated to the latest version of Solidity.

This is great news for Denaria as these upgrades will reduce gas costs and improve performance across the blockchain.

We’re aligning with Linea’s roadmap and actively updating all of our smart contracts to benefit from the upcoming updates.

Trading Chart Improvements

A high-quality trading experience starts with a high-quality chart.

For mainnet launch, you can expect a completely upgraded version of the current trading chart: faster, more responsive, and packed with the tools traders need to perform advanced analysis.

This will be a major step up from the current testnet experience and a key piece of our mission to deliver the best possible perp trading interface.

Backoffice for High-Quality Protocol Stats

High-quality data is essential to analyze the health of a protocol and uncover both its strengths and weaknesses.

So far, we’ve developed an internal backoffice that allows us to track every action taking place on the Denaria trading app. This gives us deep visibility into how the system is performing and where improvements can be made.

In the coming months, when the app goes live on mainnet, we plan to release a public version of this dashboard, giving everyone access to key metrics about Denaria. Users will be able to track cumulative trading volume, open interest, number of active users, and much more.

Regulatory Framework and Geoblocking

Developing a perpetual DEX means facing a wide range of regulatory challenges and our team is actively working on delivering a product that fits within global regulatory frameworks.

This also includes implementing a geoblocking system for users located in restricted jurisdictions.

While we’re committed to open finance, we also recognize the need to operate within evolving legal boundaries and we are actively working to ensure our perp can grow and scale.

Oracles Integrations

Decentralized oracles are crucial to Denaria’s perpetual DEX as they provide the external prices so the dynAMM can recalculate the liquidity curve after every trade.

We are finalizing an R&D phase to identify the oracle solution that integrates most effectively with Denaria’s architecture.

At present, Chainlink, already powering price feeds on our Linea Sepolia testnet, stands out as the strongest candidate as it delivers the transparency, reliability, and trustlessness our protocol requires.

Docs and Technical Content

While the product is being developed and tested, we are also focused on producing clear, complete, and in-depth technical content, helping anyone understand the technology behind Denaria.

A few weeks ago, we released the first version of our whitepaper, followed by a more complete and structured version of our testnet docs.

As we approach mainnet, you can expect even more technical resources. We’ll share detailed breakdowns of the architecture, smart contracts, liquidation mechanisms, the dynAMM engine, and the design choices behind each component of the protocol.

Our goal is to make Denaria not just transparent, but also deeply understandable.

Denaria DAO for Decentralized Governance

Last but not least, an onchain perpetual DEX needs a distributed governance and that means a DAO to steer the protocol’s future.

Denaria is exploring Aragon, a leader in DAO infrastructure, to design a governance system that is secure, efficient, and easy to use.

The DAO will empower the community to vote on key decisions such as:

• Protocol upgrades

• Fee parameters

• Listing of new collateral or markets

• Incentive programs and more

Our goal is to build a DAO that actually governs the protocol, aligning incentives between traders, liquidity providers, and long-term supporters.

Governance will go live after mainnet, and we’ll share more on the structure, voting power distribution, and initial proposals soon.

This is just the beginning. Denaria is evolving fast and we’re committed to keeping the community in the loop.

Stay tuned for other updates.