Trade Types in DeFi

How Spot Trading Works in DeFi

1. You connect your wallet to a DEX (like Raydium or Orca on Solana)
2. You select the token pair you want to trade (e.g., SOL/USDC)
3. You specify the amount of the input token
4. The DEX shows you the estimated amount of output tokens based on current liquidity pool rates
5. You confirm the transaction and pay a small network fee
6. The trade executes immediately, swapping your tokens at the current rate

DEXs use automated market makers (AMMs) and liquidity pools instead of CEX-style order books.

How Limit Orders Work in DeFi

On Solana, platforms like Jupiter offer limit order functionality:

1. You specify the token pair and the amount you want to trade
2. You set your desired price (different from the current market price)
3. Your order is stored on-chain but doesn't execute immediately
4. When the market reaches your specified price, the order executes automatically
5. If the market never reaches your price, the order remains unfilled until you cancel it

Note: Jupiter's limit orders are one of the key data sources that CLOBr analyzes to identify support and resistance levels.

How DCA Orders Work in DeFi

On Jupiter's DCA feature:

1. You specify the total amount you want to invest
2. You choose how many portions to split it into (e.g., 10 equal portions)
3. You set the time interval between purchases (e.g., minutes, hourly, daily, weekly, etc.)
4. You optionally set a minimum and maximum price range for the order to occur. If the market price is outside this range, the order is not fulfilled.
5. The platform executes trades on your schedule automatically
6. Each trade fills at whatever the market price is at that time

CLOBr sums scheduled DCA orders over the next 24 hours so you can see their real impact on market liquidity.

How Concentrated Liquidity Works

On platforms like Meteora and Raydium:

1. You deposit one or both tokens in a pair into a liquidity pool
2. You specify a price range where your liquidity will be active
3. Your capital is concentrated within that range, providing deeper liquidity
4. You earn fees when trades occur within your specified range, taking the other side of traders swapping in the pool
5. Your liquidity becomes inactive and earns no fees if the price moves outside your range

These positions can create liquidity "walls" at specific price points that CLOBr identifies as potential support and resistance levels.

How Perpetuals Work in DeFi

On Solana platforms like Drift or Zeta Markets:

1. You deposit collateral (e.g., USDC)
2. Go long (betting price rises) or short (betting price falls)
3. Use leverage to amplify gains and losses
4. Pay funding rates to keep positions open (positive or negative, depending on market balance)
5. No expiration -- hold until you close or get liquidated

CLOBr doesn't aggregate perp data directly, but perp traders still use CLOBr's liquidity levels to pick entries and exits.