The market layer
settlement left out
Nostrades binds atomic settlement to a Nostr market layer. A half-signed swap is a resting limit order, a keypair carries reputation across chains, and relays hold the book. We wrote the protocol and we run relays for it.
DeFi delivered one market function out of four.
A market does four things: it finds a counterparty, forms a price at a venue, judges who is across from you, and exchanges the value. Atomic swaps and on-chain finality solved the fourth. The other three still route through a centralized exchange, an AMM, or a single-operator book — so trades settle trustlessly after being found, priced and vetted through a trusted party.
What the chain cannot do
A chain records an address and a balance, not an actor with a history. It finalizes a transfer, but gives offers nowhere to rest, aggregate and form a price. The missing three functions are an identity problem and a venue problem, and the chain answers neither.
Where the answer already exists
Nostr ships both as native primitives, and they bind directly to chain settlement. A keypair is the identity a market runs on; a relay is where orders rest. No new chain, no new consensus, no new cryptographic primitive.
Identity and venue are the same on every chain. Only settlement varies.
Swaps as orders
The maker commits an input, names what it wants back, signs its side, and leaves the counter-leg open. That object is a firm offer at a price; a taker completes and broadcasts it. Cancel by publishing a retraction, or hard-cancel by spending the input.
Identity as market primitive
A Nostr keypair bound to the settlement key: the maker of a market is provably the settler of the trade. Web of trust carries reputation, encrypted events carry private negotiation, and one key quotes on every chain.
Relays as venues
Replaceable events are a live order book. Relays never connect to each other and hold no funds; the book is assembled client-side from whichever relays a trader reads. Orders are replicated, not hosted.
A working alpha, and a plain account of what it is not.
SwappingSats runs the pattern end to end on Liquid testnet: half-signed proposals as resting orders, one seed deriving both the Nostr identity and the Liquid wallet, kind-32121 events on relays as the book. That is the mechanism proven, and nothing more.
Not yet earned
One chain, one pair, a public book, single-seed identity. No partial fills — a single-input proposal does not split without coin selection the model does not yet provide. Relay micropayment economics are argued, not demonstrated at scale. Sybil-resistant reputation without a central authority remains open.
What is not trusted
Not an exchange operator, a matching engine, a custodian, or any particular relay. Three things are: the settlement chain, the user's own key custody, and one honest reachable relay — needed for liveness, never for safety. No actor in the model can take a counterparty's funds.
The paper states the threat model by actor, the open problems, and the conditions under which the approach would be wrong.