Introducing Reservoir
0xD5c0
January 25th, 2022

Today, we are excited to unveil Reservoir, a web3-native NFT order book protocol.

The NFT market exploded in 2021, yet it still remains relatively immature and illiquid. Most secondary trading happens on a single marketplace, orders are stored in centralized databases and the market making industry consists of a few bots making low-ball offers.

This is largely because NFT marketplaces follow a monolithic model, tightly coupling their front-ends, order books and swap contracts, which fragments liquidity and creates bottlenecks for innovation.

Reservoir unbundles this model with an open and permissionless order book that aggregates all liquidity into a single shared pool.

Reservoir’s modular architecture is a new primitive that unlocks powerful possibilities:

  1. An abundance of new applications can emerge, from community-owned marketplaces to prosumer portfolio managers, all without fragmenting liquidity.
  2. Tools can specialize on one segment of the market, like wallets offering built-in sell functionality, or a rarity explorer that is focused on the buying experience.
  3. Novel new forms of liquidity (AMMs, collection-wide offers, etc) can quickly find adoption by feeding into all of the marketplaces and interfaces leveraging the shared order book.
  4. Anyone can provide liquidity, without worrying about API keys or rate limits, making it more accessible to both professional market makers and regular collectors.

Reservoir is not another marketplace. It's a new layer in the stack, designed to complement the layers above and below. WAGMI.

By fully embracing the web3 principles of open data and composability, Reservoir aims to unleash a wave of innovation at all layers of the stack, bringing vastly improved liquidity to NFTs.

Low-cost 🤝 Permissionless

When designing an order book, you typically have two choices: optimize for cost (store orders off-chain) or optimize for openness (store orders on-chain). On Ethereum, where 80% of NFT value is traded, off-chain order books have dominated (Open Sea, Rarible, etc), because it's too expensive to store most orders on-chain. Ironically, the more secure a chain is, the more it pushes storage off-chain.

Reservoir introduces a 3rd option. Orders are stored on-chain, but on a different chain. Because orders are self-contained signed messages, they don't need the full might of Ethereum to secure them. Instead, Reservoir uses Arweave as a low-cost "Data Lake" for raw order storage. It's cheap enough that marketplaces can still offer the free listing experience that users expect, and secure enough to guarantee permissionless data availability.

Anyone can run the open-source Reservoir Indexer that combines raw order data from Arweave, with ownership data from Ethereum, to trustlessly reconstruct the state of the order book. Sprinkle in an advanced metadata indexing engine and you get the Reservoir API, a one-stop shop for building liquidity-powered NFT applications.

Normally Arweave's five minute block times would be too slow for a fast-moving order book, but here's the cool part: we don't actually need to wait for blocks to be confirmed. Because the orders are targeted at a different chain, the Indexer can ingest them as soon as they hit the mempool, making the Reservoir Order Book real-time, highly available and globally consistent.

Get Involved

Reservoir is live on Ethereum, powering a number of applications that you may have already seen. Today we are lifting the curtain and inviting the NFT community to get involved in a number of ways:

Explore - Try some of the Apps already built with Reservoir:

  • Levee - Place offers across any collection or attribute that all owners can accept
  • Loot.Exchange - A no-fee community marketplace for all things Loot
  • Floor Finder - Explore detailed floor breakdowns by attribute of popular NFTs
  • Collect All - Tool for finding matching Camp Adam Sets
  • ENS Cafe - Find new & second-hand ENS names [COMING SOON]
  • Forgotten Runes Community Marketplace [COMING SOON]
  • New and improved Blitmap Market Aggregator [COMING SOON]

Collaborate - Contribute to the ongoing design and development:

  • Check out the Protocol Docs and share feedback
  • Join the core team! Right now we need people with traditional backend and devops experience to help optimize the Indexer for scale. No web3 experience required, and offering a $10k bounty for any referrals 💸 DM @peterwatts in Discord
  • Discuss the roadmap in #protocol channel

Build - Start building on top of the Reservoir API

Arweave TX
urXg_pl1XplB3rThuCAfiBC9dxbVcr7ZzbTazucPkAE
Ethereum Address
0xD5c0D17cCb9071D27a4F7eD8255F59989b9aee0d
Content Digest
cW3-xUuLpqpfYmTMZhfTowOrJssEL_iSThuNoUmMpxE