MiniDEX

A mini decentralized exchange (DEX) designed to swap two ERC-20 tokens (Token A and Token B) using a fixed exchange rate, with a liquidity provider (LP) fee and a frontend interface.

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About the project

MiniDEX is a simplified decentralized exchange platform. It allows users to perform automatic and instant swaps of ERC-20 tokens directly from their Web3 wallet (such as MetaMask), without relying on intermediaries or centralized order books.

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Problem it solves

Traditional exchanges and centralized trading platforms act as custodians of your funds, charge high fees, require registration processes (KYC), and are vulnerable to hacks and censorship. MiniDEX solves this by:

• Maintaining user custody: Transactions occur directly from wallet to wallet via smart contracts.
• Removing intermediaries: Exchange rules and rates are self-executed on-chain.
• Ensuring transparency: Contract code and liquidity balances are publicly auditable in real time.

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How it works

1. Custom ERC-20 tokens: The project implements two tokens: Token A (TKNA) and Token B (TKNB). Both tokens include a public faucet function to facilitate local testing.
2. Exchange contract::
   • Manages liquidity for both tokens.
   • Applies a fixed conversion rate (1 Token A = 2 Token B).
   • Simulates a basic Uniswap-like model by charging a 0.3% fee on the input token.
   • Emits a Swap event for every successful transaction.
3. Swap mechanism:
   • Token A to Token B: If you send 100 TKNA, a 0.3% fee is deducted (0.3 TKNA). The remaining amount (99.7 TKNA) is multiplied by 2, giving you exactly 199.4 TKNB.
   • Token B to Token A: If you send 200 TKNB, a 0.3% fee is deducted (0.6 TKNB). The remaining amount (199.4 TKNB) is divided by 2, giving you exactly 99.7 TKNA.

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How to run

Follow these steps to compile, test, and run the application locally.

1. Clone the repository and install dependencies:

npm install

2. Compile the Solidity smart contracts:

npx hardhat compile

3. Run the unit test suite:

npx hardhat test

The tests verify swap functionality, correct fee deduction, changes in user/contract balances, and rejection of invalid transactions.

Start a local development node:

npx hardhat node

This will start a local test blockchain at http://127.0.0.1:8545 with 20 pre-funded accounts, each with 10,000 ETH.

5. Deploy the contracts to the local network:

In another terminal tab, run:

npx hardhat run scripts/deploy.js --network localhost

This script deploys TokenA, TokenB and Exchange, transfers 500,000 tokens of each type as initial liquidity, and automatically generates the frontend/config.js file with the contract addresses.

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Web3 Frontend

The project includes a minimalist, futuristic UI with Glassmorphism design and MetaMask support.

To open the interface:

1. Open the frontend/index.html file directly in your browser.
2. Connect your MetaMask wallet to the Hardhat local network:
   • RPC URL: http://127.0.0.1:8545
   • Chain ID: 31337
   • Symbol: ETH
3. Import one of the private keys provided by npx hardhat node node into MetaMask to obtain local ETH.
4. Use the Token Faucet in the interface to claim your first 100 TKNA or 100 TKNB.
5. Approve and execute your swaps!

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Tech Stack

• Solidity (v0.8.20): Language for writing smart contracts.
• Hardhat: Professional development environment for compiling, testing, and deploying contracts.
• OpenZeppelin Contracts: Industry standard for secure ERC-20 and access control implementations.
• Ethers.js (v6): Library for interacting with the Ethereum blockchain from JavaScript.
• HTML5, Vanilla CSS3 & Vanilla JavaScript: For the responsive Web3 frontend with glassmorphic effects and real-time toast notifications.