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Documentation Index

Fetch the complete documentation index at: https://docs.ratiofx.com/llms.txt

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Ratio uses a hybrid architecture — combining the trust and auditability of on-chain settlement with the performance and flexibility of off-chain orchestration. Partners experience instant settlement; inventory management and risk monitoring happen behind the scenes.

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Design philosophy

Ratio’s FX Engine mirrors how institutional FX dealer desks operate — using oracle-based pricing, rules-based spread construction, and inventory-aware mid-rate adjustment — rather than an AMM bonding curve. The goal is predictable, institutionally acceptable execution with zero AMM slippage and full on-chain auditability.
The architecture separates the user experience (instant settlement) from market execution (inventory management). Partners always receive instant, atomic settlement regardless of the protocol’s internal inventory position.

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Architecture layers

System Architecture Ratio consists of three layers:
Handles everything that requires trust and immutability:
  • Swap execution — Atomic FX swaps that settle in a single transaction
  • Pool accounting — Stablecoin pool balances, LP token management, and fee distribution
  • Oracle price feeds — Real-time FX rates from institutional-grade oracles pushed on-chain
  • LP token mechanics — kToken minting, burning, and auto-compounding of swap fee rewards
All settlement data is recorded on-chain, providing an immutable audit trail for every transaction.
Handles everything that requires speed and flexibility:
  • FX quote construction — Multi-step pricing pipeline that fetches oracle rates, evaluates risk conditions, constructs spreads, and issues executable quotes
  • Risk monitoring — Continuous evaluation of oracle health, market volatility, pool inventory, and system exposure
  • Inventory rebalancing — Coordination with external market makers to restore pool health when imbalances exceed thresholds
  • Partner and configuration management — Partner credentials, fee schedules, corridor parameters, and operational controls
Partners interact with Ratio through a REST API that abstracts all internal complexity. The API supports:
  • Two quote types (indicative and firm)
  • Webhook-based event notifications
  • Real-time system health queries
  • Full fee transparency in every response
Partners request quotes, execute swaps, and receive settlement confirmations without interacting with the blockchain directly.

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How the layers interact

A typical swap flows through all three layers:
1

Partner requests a quote

Via the REST API (integration layer).
2

Backend constructs the quote

Fetches oracle prices, checks risk conditions, builds spread (off-chain layer).
3

Partner accepts the quote

Submits execution request via the API.
4

Swap executes atomically on Kaia

Source pool debited, destination pool credited, fees distributed (on-chain layer).
5

Settlement confirmation returned

Via API response and/or webhook callback.
The entire flow completes in seconds. From the partner’s perspective, it’s a single API call that returns a confirmed settlement.

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Smart contract architecture

Ratio’s on-chain components are deployed as purpose-built smart contracts on Kaia. The contracts handle swap execution, pool management, fee collection and distribution, oracle price aggregation, and LP deposit/withdrawal accounting. All contracts are upgradeable and configurable — pool parameters, fee schedules, and operational thresholds can be updated without redeploying contracts or interrupting service.

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Scalability

New corridors

Adding a currency pair requires only configuration (oracle feeds, pool parameters, fee tiers). No code changes or contract deployments.

New stablecoins

Each stablecoin gets its own pool. Adding a stablecoin is an operational task, not an engineering one.

Volume growth

The off-chain pricing engine handles quote construction independently of on-chain throughput. Kaia’s sub-second blocks support high transaction volumes.

Partner growth

Partner-specific configuration (fee overrides, corridor access, volume limits) is managed without protocol changes.