1.

Project Overview
1. Goal:

• Integrate a Python-based trading bot with the OKX Web3 DEX aggregator on a supported
test network (e.g., OKTC testnet).

• Execute multi-token trades according to our arbitrage or trading strategies.

• Retrieve and monitor real-time balances, positions, and performance metrics.

2. Scope:

• Connect to a testnet RPC.

• Use OKX’s DEX aggregator endpoints for quotes and transaction builds.

• Sign and broadcast transactions on the testnet.

• Maintain records of trades, balances, and performance metrics.

2. Technical Requirements
1. Language & Libraries

• Python 3.8+

• Libraries:

1. requests for HTTP requests to OKX APIs.

2. web3 for on-chain interaction (signing, sending transactions, etc.).

3. pandas (optional) for data handling and performance tracking.

4. numpy or other libraries if needed for calculations.

2. Environments

• Testnet RPC: e.g., https://exchaintestrpc.okex.org for OKTC testnet.

• Wallet:

• A dedicated test wallet with a private key.

• Must be funded with test tokens (e.g., test OKT on OKTC testnet or test ETH on
Ethereum Goerli, etc.).

3. Endpoints (OKX DEX Aggregator)

• Quote Endpoint: e.g. GET /api/v5/dex/getQuote

• Build Transaction Endpoint: e.g. GET /api/v5/dex/buildTransaction

• Authentication/Headers: As specified in the official OKX Web3 DEX docs.

4. Chain IDs

• OKTC Testnet uses chain ID 65.

• If we include other testnets (e.g., Ethereum Goerli), the chain ID is 5 or 11155111 for
Sepolia.
 5. Smart Contract Interaction

• We will not deploy custom smart contracts unless needed for multi-step arbitrage in a single
transaction.

• The aggregator’s recommended route will be fetched, transaction built, signed, and sent
directly.

3. Functional Requirements

3.1 Trade Workflow

1. Fetch Markets & Quotes

• Input pairs (or paths) from a config (e.g., JSON/yaml file).

• For each pair (tokenA/tokenB), call /api/v5/dex/getQuote with:

• chainId

• fromToken (contract address)

• toToken (contract address)

• amount in the smallest unit (wei or similar).

2. Evaluate Strategy

• Based on the returned quote (expected output, swap route, etc.), decide whether to proceed.

• Incorporate any arbitrage or multi-step logic.

3. Build Transaction

• If proceeding, call /api/v5/dex/buildTransaction with similar parameters.

• Parse the transaction data (to, data, gasPrice, gasLimit, etc.).

4. Sign & Broadcast

• Use web3.py to sign the transaction with the test wallet private key.

• Broadcast the transaction to the chain via web3.eth.sendRawTransaction.

5. Receipt & Confirmation

• After sending, monitor the transaction hash.

• Check on-chain confirmation status.

• Log any relevant data (block number, gas used, etc.).

6. Balance & Performance Tracking

• After each trade, fetch the current on-chain token balances for the relevant tokens.

• Calculate net PnL in terms of a base token (e.g., test OKT or stable token).

• Store all data (quotes, final amounts, gas fees, net outcome) in a local database
(SQLite/Postgres) or CSV.

3.2 Multi-Token & Arbitrage Logic

 1. Multi-Token Trading

• The system should support multiple token pairs (e.g., A → B, B → C, etc.).

• Optionally, if you have an arbitrage route (e.g., A → B → C → A), the system will:

1. Get quotes for each step.

2. Evaluate combined potential profit vs. gas fees.

3. If profitable, execute one or multiple transactions (if aggregator can handle multi-
hop in a single transaction, use it. Otherwise, do them sequentially).

2. Profit Calculation

• Compare starting balance of the base token (or reference token) with the final balance after
the cycle.

• Subtract gas costs to see net gain/loss.

4. Implementation Details

4.1 Configuration Files

• config.json or .env containing:

• TESTNET_RPC_URL

• PRIVATE_KEY

• OKX_API_BASE_URL (e.g., https://www.okx.com)

• CHAIN_ID (e.g., 65 for OKTC testnet)

• Token addresses (e.g., A_TOKEN_ADDRESS, B_TOKEN_ADDRESS, etc.)

4.2 Directory Structure (Example)

project_root/
├─ config/
│ └─ config.json
├─ src/
│ ├─ main.py
│ ├─ dex_client.py
│ ├─ trading_strategy.py
│ ├─ logger.py
├─ requirements.txt
└─ README.md

1. dex_client.py

• Contains logic for calling OKX aggregator endpoints.

• Functions like get_quote(...), build_transaction(...), etc.

2. trading_strategy.py

• Houses the logic for analyzing quotes and deciding whether to trade.

• Could contain arbitrage logic, multi-route checking, etc.

 3. main.py

• The entry point.

• Loads config, initializes web3, runs strategy loop.

4. logger.py

• Handles logging messages to console and/or files.

4.3 Example Pseudocode

# main.py
import time
from web3 import Web3
from dex_client import OKXDEXClient
from trading_strategy import execute_arbitrage_strategy
from config_loader import load_config

def main():
config = load_config("config/config.json")

# Setup web3
web3_provider = Web3(Web3.HTTPProvider(config["TESTNET_RPC_URL"]))

# Initialize DEX client

dex_client = OKXDEXClient(
base_url=config["OKX_API_BASE_URL"],
web3=web3_provider,
private_key=config["PRIVATE_KEY"],
chain_id=config["CHAIN_ID"]
)

# Trading loop (poll every X seconds)

while True:
try:
# Execute your strategy
execute_arbitrage_strategy(dex_client, config)
except Exception as e:
print(f"Error in trading loop: {e}")

time.sleep(30) # Wait before next cycle

if __name__ == "__main__":
main()

5. Data & Performance Tracking

1. Balance Tracking

• After each trade, call web3.eth.call(...) or token_contract.functions.balanceOf(wallet).call() to

get updated token balances.

• Store in a structured format (CSV, DB).

2. PNL Calculation

• Track the net difference in the base token.

 • Subtract gas costs from final profits.

3. Logging & Reporting

• A simple local CSV or DB can store each transaction’s:

• Timestamp

• Token in/out amounts

• Gas used & gas price

• Net profit/loss.

• Optionally, integrate with dashboards (e.g., Grafana or Jupyter Notebooks) for performance
visualization.

6. Security & Testing

1. Private Key Storage

• Do not commit your private key to version control.

• Use environment variables or encrypted secrets management.

2. Testnet Only

• Ensure you are using the correct chain ID and RPC URL for the testnet.

• Use faucets to get test tokens.

3. Automated Unit Tests

• For each function in dex_client.py, create basic tests verifying that the returned data from
quotes and buildTransaction is parsed correctly.

• Mock or stub out network calls where possible.

4. Integration / End-to-End Testing

• On the real testnet, run small trades to verify everything works (quote, build tx, sign,
broadcast, confirm, check results).

7. Deliverables
1. Fully Documented Python Codebase

• All modules with docstrings and inline comments.

• Clear readme describing how to run, how to config, etc.

2. Configuration File

• config.json or .env with sample values.

3. Logging & Reporting

• CSV or DB capturing live trades.

• Basic summary of performance metrics.

4. Test Suite
 • Unit tests covering core logic (quote retrieval, transaction build, etc.).

• Integration test that demonstrates a successful test trade.

8. Timeline & Milestones

1. Milestone 1: Environment setup & basic quoting

• Deliver code that can retrieve quotes from OKX aggregator for a sample token pair.

2. Milestone 2: Trading transaction

• Build, sign, and send a transaction on testnet. Confirm success.

3. Milestone 3: Full trading loop & performance logging

• Implement the full loop with real-time balance checks, PnL calculation, logs.

4. Milestone 4: Multi-Token / Arbitrage extension

• Implement multi-step routes.

• Evaluate performance across multiple pairs or cyclical trades.

9. Summary
• Purpose: Create a Python-based system that performs testnet DEX trades via OKX’s
aggregator.

• Key Steps:

1. Fetch quotes.

2. Decide on trades (arbitrage logic).

3. Build transactions.

4. Sign & broadcast on testnet.

5. Track balances and performance.

• Outcome: A robust, tested solution that only risks testnet tokens, allowing safe
experimentation with your multi-token algo trading strategy before going live on mainnet.