The swap lifecycle
Quote generation
The Bolt Oracle produces a deterministic reference price based on global market data. This price is independent of pool state, trade size, or on-chain liquidity depth. It reflects the real market price of the asset pair at the moment of the quote.
User swap
A user (or an aggregator routing through Bolt) initiates a swap on a at the quoted price. The swap is submitted on-chain with the oracle price embedded in the transaction.
On-chain settlement
The Outpost validates the oracle price (checking expiration windows and deviation limits), executes the swap at the validated price, and delivers assets to the user. Settlement is fully on-chain and atomic. There is no off-chain coordination, no solver, and no waiting.
Off-chain hedge
The market maker immediately hedges the trade on an external venue. This closes the directional exposure created by the swap. The hedge happens within seconds of settlement, ensuring the pool does not carry unmanaged risk.
Architecture diagram
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Architecture components
Architecture components
Bolt’s architecture consists of three core components that work together to deliver zero slippage execution.The Adaptive Velocity Oracle (AVO) produces deterministic reference prices by ingesting real-time order books from multiple centralized exchanges and applying an adaptive velocity model that predicts where price is heading rather than chasing it. Prices are published on-chain and are verifiable by anyone. The AVO is the trust boundary of the system: every other component validates its output rather than computing prices independently.The Outpost is the on-chain smart contract that executes swaps. Each Outpost is deployed on a supported network and manages its own liquidity pool. When a swap is submitted, the Outpost validates the oracle price against expiration and deviation parameters, then settles the trade atomically. Outposts are fully composable: other smart contracts can call them directly, and aggregators can route through them via SDK.The Market Maker operates across three sequential sub-roles that together complete every swap. As Order Settler, it immediately provides liquidity to the user on-chain at the oracle-validated price the moment the trade is submitted. As Hedger, it closes the resulting directional exposure on external venues within seconds of settlement. As Rebalancer, it returns hedged assets to the Outpost pool to restore inventory for the next trade. This role requires capital, hedging infrastructure, and operational speed, but the capital requirement is minimal compared to traditional AMM positions because the pool is a settlement layer, not a pricing engine.
Security model
Security model
Bolt’s security model is built around three protective mechanisms that ensure swaps execute safely and predictably.Price expiration windows. Every oracle price carries a timestamp. The Outpost rejects any swap where the oracle price has expired. This prevents stale pricing from being used to extract value from the pool.Deviation limits. The Outpost enforces maximum deviation between the oracle price and the last known market price. If the oracle price deviates beyond the configured threshold, the swap is rejected. This protects against oracle manipulation or extreme market volatility.Adaptive Velocity Oracle (AVO). Bolt’s AVO ensures prices reflect best-available market rates by ingesting real-time order books from multiple centralized exchanges, applying an adaptive velocity model to predict where price is heading, and sizing spreads using Avellaneda-Stoikov market-making theory. The on-chain price cannot deviate meaningfully from real-time market consensus. Every fill is scored for flow toxicity, informed flow is hedged aggressively, and circuit breakers halt quoting automatically if conditions exceed safety thresholds.The oracle is the primary trust boundary. Every model has one: AMMs trust the bonding curve, RFQs trust the solver, CLOBs trust the order book depth. Bolt’s AVO prices are verifiable on-chain, derived from depth-weighted composite mid-prices across multiple venues, and subject to the expiration and deviation protections described above.
Liquidity lifecycle
Liquidity lifecycle
The liquidity lifecycle in Bolt is fundamentally different from traditional AMMs. There is no impermanent loss, no rebalancing cost borne by LPs, and no requirement for deep capitalization.Deposit. A liquidity provider deposits assets into an Outpost pool. This is a single-sided deposit: no paired asset requirement, no price range to manage.Facilitation. The market maker uses the deposited liquidity to settle swaps at oracle prices. Each swap draws from the pool, and the market maker hedges the resulting exposure externally.Fee accrual. LPs earn fees on every swap settled through their deposited liquidity. Fee rates are determined by the market maker’s pricing parameters and the volume flowing through the Outpost.Rebalancing. Hedged assets are returned to the pool by the market maker. Because hedging is continuous and automated, the pool maintains readiness without requiring LPs to actively manage their positions.Withdrawal. LPs can withdraw their deposited assets plus accrued fees. Because the market maker hedges all directional exposure, LP positions do not suffer impermanent loss.
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