Decentralized Exchange (DEX) on Ethereum

A simple yet powerful decentralized exchange (DEX) built on Ethereum using Solidity and Foundry. This DEX allows users to swap between ETH and a custom ERC-20 token, provide liquidity, and earn trading fees.

Features

• Automated Market Maker (AMM) - Uses a constant product formula (x * y = k) for price determination
• Liquidity Pools - Users can provide liquidity and earn trading fees
• LP Tokens - ERC-20 tokens representing liquidity provider shares
• Token Swaps - Seamless swapping between ETH and the native token
• No Price Oracle - Purely market-driven pricing based on pool reserves

Smart Contracts

1. Token.sol

An ERC-20 token contract with a fixed supply of 1,000,000 tokens minted to the deployer.

2. Exchange.sol

The core DEX contract that handles:

• Adding/removing liquidity
• Swapping between ETH and tokens
• LP token minting/burning
• Price calculations

Development

Prerequisites

• Foundry
• Node.js (for development tooling)
• Git

Setup

1. Clone the repository:

   git clone https://github.com/your-username/dex-app.git
   cd dex-app

2. Install dependencies:

   forge install

3. Compile contracts:

   forge build

Testing

Run the test suite:

forge test -vvv

Deployment

1. Set up your environment variables in .env:

   PRIVATE_KEY=your_private_key
   RPC_URL=your_ethereum_node_url
   ETHERSCAN_API_KEY=your_etherscan_api_key
   

2. Deploy the Token contract:

   forge create --rpc-url $RPC_URL --private-key $PRIVATE_KEY src/Token.sol:Token

3. Deploy the Exchange contract (replace TOKEN_ADDRESS with the deployed Token address):

   forge create --rpc-url $RPC_URL --private-key $PRIVATE_KEY src/Exchange.sol:Exchange --constructor-args TOKEN_ADDRESS

Usage

Adding Liquidity

1. Approve the Exchange to spend your tokens:

   await token.approve(exchange.address, amount);

2. Call addLiquidity with the token amount (ETH is sent as value):

   await exchange.addLiquidity(tokenAmount, { value: ethAmount });

Swapping Tokens

• ETH to Token: Send ETH to ethToTokenSwap
• Token to ETH: Call tokenToEthSwap with token amount

Removing Liquidity

Call removeLiquidity with the amount of LP tokens to burn.

Security

• Uses OpenZeppelin's battle-tested contracts
• Implements reentrancy guards
• Includes input validation and require statements
• Uses SafeMath for arithmetic operations

License

MIT

Contributing

Contributions are welcome! Please open an issue or submit a pull request.

Acknowledgements

• OpenZeppelin

• Foundry

• Uniswap V1 for inspiration

• Forge: Ethereum testing framework (like Truffle, Hardhat and DappTools).

• Cast: Swiss army knife for interacting with EVM smart contracts, sending transactions and getting chain data.

• Anvil: Local Ethereum node, akin to Ganache, Hardhat Network.

• Chisel: Fast, utilitarian, and verbose solidity REPL.

Documentation

https://book.getfoundry.sh/

Usage

Build

$ forge build

Test

$ forge test

Format

$ forge fmt

Gas Snapshots

$ forge snapshot

Anvil

$ anvil

Deploy

$ forge script script/Counter.s.sol:CounterScript --rpc-url <your_rpc_url> --private-key <your_private_key>

Cast

$ cast <subcommand>

Help

$ forge --help
$ anvil --help
$ cast --help