# Autonomous Trading System (ATS)

The ATS is the umbrella for Noderr's autonomous trading, yield generation and market making.

> **Testnet.** No strategy trades vault capital yet, and no yield has been earned. See [Testnet Status](../../introduction/testnet-status.md).

## What it is

The ATS and the Autonomous Trading Engine (ATE) are a conceptual umbrella, not a standalone engine service. In the deployed protocol they map to three contracts:

- **`ExecutionRouter`:** trade routing and execution.
- **`StrategyRegistry`:** the registry of approved strategies and their gating.
- **`BaseRateGovernor`** (Base-Rate Governor): rate and risk governance.

The ATS has three parts:

1. **ATE.** Runs the trading strategies.
2. **Floor Engine.** Covers the vault floor and $NODR price support. Its buyback behaviour is implemented by the Base-Rate Governor and the revenue driven buyback flow.
3. **[Third party contributor system](./third-party-contributors.md).** Planned. Outside developers will submit strategies and earn from them.

```mermaid
graph TD
    A["Autonomous Trading System (ATS)"] --> B("Autonomous Trading Engine (ATE)");
    A --> C("Base-Rate Governor / Buyback Flow");
    A --> D("Third Party Contributor System");
    B --> E{"Strategy Portfolio"};
    E --> F["Market Making"];
    E --> G["Arbitrage"];
    E --> H["Statistical Arbitrage"];
    E --> I["Yield Farming"];
    C --> J{"Price Monitoring"};
    J --> K["Execute Buy-Backs"];
    J --> L["Provide Liquidity"];
    D --> M{"Strategy Submission Portal"};
    M --> N["Backtesting"];
    N --> O["Live Testing"];
    O --> B;
```

Each part is an independent, upgradeable onchain module, not one monolithic engine. New strategies, data sources and execution venues can be added without changing the others.

## Strategy pipeline today

- One protocol keeper submits strategies to the `StrategyRegistry`.
- Guardian nodes vote on the backtest results.
- Candidate selection uses `keccak(timestamp, prevrandao, nonce)`. It does not use Chainlink VRF.
- LIVE status in the registry does not move capital. No vault capital is deployed to strategies yet.
- Shadow Data Swarm and paper trading are not live yet.

Selection is designed to rank by risk adjusted return (Sharpe ratio), with allocation that responds to market conditions.

## Autonomous Trading Engine (ATE)

The ATE is designed to run data driven strategies across multiple DeFi protocols and exchanges. It is the ATE sleeve of each vault: higher variance alpha next to the Floor. No distinguishable alpha has been demonstrated to date.

Its yield is meant to go to vault depositors and the treasury, which funds development and node operator rewards.

Each vault has its own target APY band. See the [vault table](../../introduction/core-concepts.md#vaults). These are targets, not guaranteed. On testnet no venue is bound and no capital is deployed. Depositors who also stake $NODR and run a node can stack node rewards on top, toward a combined **8–28%** vault plus node target. Node rewards are a revenue share, not a fixed APY. 28% is the combined figure, never the vault only return.

Strategy types in the design:

- **Market making and liquidity provision:** earn fees by providing liquidity on decentralized exchanges and DeFi protocols.
- **Arbitrage:** capture price differences for the same asset across exchanges and protocols.
- **Statistical arbitrage:** use statistical models to find pricing inefficiencies.
- **Market neutral strategies:** profit from inefficiencies without directional exposure.
- **Volatility strategies:** use options and derivatives.
- **Yield farming:** allocate capital across yield protocols.

The mix is designed to work across market cycles:

- **Bull markets:** long strategies aim to capture upside. Leverage can amplify gains and losses. New protocol opportunities appear.
- **Bear markets:** short strategies aim to profit from declines, and hedging seeks to protect capital. Inverse vaults target positive returns, not guaranteed.
- **Sideways markets:** arbitrage, volatility strategies and yield farming.

Capital efficiency comes from four things: leverage within defined risk limits, cross protocol arbitrage, automated rebalancing to target allocations, and gas optimization. Leverage also amplifies downside. Returns are not guaranteed.

## Floor Engine

The Floor Engine name covers two jobs.

### Vault floor

The Floor is the principal protected part of each vault. It is designed to earn a stable baseline from:

- Stablecoin yield farming on established protocols
- T-Bills and real world assets, when available
- DeFi protocol incentives
- Interest from overcollateralized lending markets

### NODR price support

The Floor Engine is also designed to support a price floor for $NODR. It does not guarantee one. Its firepower is bounded by treasury and buyback capacity. The Base-Rate Governor caps buybacks and reward distributions at a share of trailing net revenue.

The engine monitors the $NODR price across multiple exchanges. If the price falls below the governed floor threshold, it will:

1. **Buy back.** Use the Token Buybacks revenue line (15% of protocol revenue) to buy NODR on the open market. This bucket is separate from the Treasury Reserve (35%).
2. **Provide liquidity.** Add liquidity to a $NODR pair, for example NODR/ETH, on a decentralized exchange on Base L2. The liquidity provisioning design sets the pairing.

Governance sets the floor threshold and the buyback capital. Today that is the Safe and timelock described in [Governance](../governance/README.md). Once two-chamber DAO voting is active, the community will be able to adjust them.

## Risk controls

Planned safeguards, for the treasury and for vault depositors:

- **Position sizing:** a maximum exposure per strategy or position.
- **Diversification:** each strategy adapter has its own cap in its configuration. The Floor and ATE allocations are engines, not single strategies.
- **Stop loss orders and drawdown thresholds:** exit positions at a set loss, and pause a strategy on losses.
- **Circuit breakers:** emergency stops on abnormal conditions.
- **Real time monitoring:** watch all active positions and strategies for anomalies.
- **Secure key management.**

## Who earns

All yield is designed to come from real economic activity, not token emissions. Supply is fixed at 100 million NODR, so holders are not diluted.

- **Vault deposits** earn a proportional share of vault returns.
- **Staked NODR** receives additional protocol rewards.
- **Node operators** will be paid from the protocol revenue share, not a fixed APY band. Rewards are targeted as dollar amounts that scale with tier (Oracle highest, then Guardian, Validator, Micro), contribution and TrustFingerprint. Rewards are not being paid yet.
- **Governance participation** is planned to earn bonus rewards once DAO voting is active.

The **RewardDistributor** contract handles distribution: automatic share calculation, gas efficient batch distributions, Merkle tree proofs and real time reward tracking.

## Planned

- **Shadow Data Swarm.** A proposed decentralized network of nodes that would validate and backtest strategies before approval. It is not implemented onchain. Only a small fraction of submitted strategies would pass its testing, and only a fraction of those would go live.
- **Performance reporting.** Current APY by vault, strategy breakdown, Sharpe ratio and historical data. Attribution by strategy, asset class and protocol, plus fee impact on net returns.
- **New yield sources.** Cross chain strategies, real world asset yields, options strategies and custom strategies for large allocators.

## Next

- [Vaults](../vaults/README.md)
- [Third party contributors](./third-party-contributors.md)
- [Strategy contracts](../smart-contracts/strategy-contracts.md)
- [Governance](../governance/README.md)