Carbon Solution & Architecture Overview
Carbon's structural insight is simple: different asset classes need different solver mechanics, but they don't need different rails. Crypto perpetuals and real-world asset CFDs both settle through the same Automated RFQ (ARFQ) execution layer, into the same on-chain account, from the same wallet.
This page walks through the system at a high level.
Two solver tracks, one venue
Carbon runs two distinct solver tracks, each suited to its asset class.
Both tracks run on the same execution layer. From the trader's view, opening a long on AAPL and a long on BTC are the same action. The solver layer underneath is what changes.
Together, that is 950+ markets in one account, with new markets added every week.
Bridging Liquidity On-Chain
Carbon combines the performance of centralized infrastructure with the guarantees of on-chain settlement.
Exchange-grade Execution: Carbon routes orders to solvers that hedge across the deepest venues in crypto and TradFi, including Binance, Bybit, and global CFD brokers.
On-Chain Finality: All trades settle on-chain with locked collateral and transparent outcomes. No off-chain IOUs or synthetic fills.
By abstracting execution and standardizing settlement through ARFQ, Carbon delivers a hybrid model:
Speed, spreads, and liquidity from the largest markets in the world.
Full custody, transparency, and control through on-chain infrastructure.
You no longer have to choose between CEX liquidity and DEX transparency. Carbon gives you both.
Automated RFQ (ARFQ): the execution model
The traditional trading process involves traders requesting a quote (RFQ) from market makers. When a trader wants to long or short a derivative contract at a specific price and size, market makers provide customized quotes. The trader reviews and picks the best one. The process is slow but allows for tailored price discovery.
Carbon simplifies this by continuously streaming the best available quotes. Instead of waiting, traders see the most competitive price and conditions in real time. This eliminates the delay and complexity of traditional RFQ.
Carbon calls this Automated RFQ (ARFQ): the next-generation execution layer that brings RFQ-grade pricing to on-chain trading without the manual step.
Phase 1: Off-chain quote streaming
Trader inputs an order. From the Carbon webapp, the trader specifies asset, size, direction, and leverage (e.g. "long 1 BTC at 10x", or "long 100 AAPL at 5x").
Solvers stream quotes. The system fetches live quotes from solvers - third-party market makers for crypto perps, the Carbon Solver for CFDs - showing price, slippage, fees, and funding rate.
Trader sees the best quote. No manual comparison, no quote-request roundtrip. The most competitive available price is displayed instantly.
Note: Steps 1 - 3 happen off-chain through the Carbon exchange.
At this point, no capital has been committed by the market maker yet. The quote is simply a real-time offer displayed automatically.
Phase 2: On-chain commitment (steps 4-6)
Trader sends a request to trade. The trader signs the request and locks their collateral on-chain.
Solver accepts. The solver matches the trader's collateral with their own on-chain margin.
Bilateral agreement created. A symmetric, isolated bilateral contract is created on-chain. One side owes the other based on price movement. The contract remains in effect until the position is closed or liquidated.
Note: Steps 4-6 are handled on-chain, ensuring that all agreements and collateral are securely recorded.
Phase 3: Hedging (step 7)
Solver hedges. The solver hedges their position on external venues - CEXs, OTC desks, options markets, or institutional brokers - or chooses to take directional exposure. This happens off-chain, on the solver's books.
The trader's collateral remains locked in the bilateral agreement, isolated from the solver's hedging activity. The trader does not need to trust the solver's solvency. If the solver goes offline or fails to maintain margin, the protocol's liquidator network closes the solver's on-chain position.
Settlement guarantees
On-chain settlement is the foundation. Every Carbon position:
Locks the trader's collateral in the protocol's smart contracts before it opens.
Locks the solver's matching collateral on-chain at the same moment.
Settles based on transparent, oracle-resolved index prices.
Can be closed or liquidated at any time without reliance on the counterparty's cooperation.
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