# Strike Node Strike is built on Cardano, but Cardano's base layer throughput is not sufficient for a high-performance perpetuals exchange. Sub-second order matching, real-time liquidations, and high-frequency trading demand latency and throughput far beyond what any current L1 can provide natively. Strike V2 is built as its own network layer on top of Cardano. All order matching, position management, and balance updates are processed by the Strike node — a purpose-built execution layer optimized for derivatives trading. The L1 serves as the settlement and custody layer, where all deposited funds are held in on-chain locker contracts. This architecture separates execution from settlement: trades execute at the speed of the Strike network, while the security of user funds is anchored to the underlying blockchain. ### What the Node Does The Strike node is responsible for all core exchange operations: * **Order Sequencing** — Every incoming order is assigned a unique nonce, guaranteeing deterministic ordering. Two orders submitted at the same time will always be processed in the same order by every node, ensuring consistent state across the network. * **Order Matching** — The node runs a full order book matching engine with price-time priority. Incoming orders are matched against resting orders on the opposing side of the book. Partial fills, post-only, reduce-only, and conditional orders (stop-loss, take-profit) are all handled natively. * **Position & Balance Management** — All account balances, open positions, margin requirements, and unrealized PnL are tracked in real time by the node. Every state transition is deterministic — given the same ordered set of inputs, any node will arrive at the same state. * **Liquidations** — The node continuously monitors positions against maintenance margin requirements. When an account's margin ratio falls below the threshold, the node triggers liquidation automatically — no external keeper network required. * **Funding Rate Calculations** — Funding payments between longs and shorts are calculated and applied by the node at regular intervals, keeping perpetual contract prices aligned with the underlying spot price. ### Where Transactions Live Strike separates transaction data across two layers: #### Execution Layer (Strike Network) All trading activity lives on the Strike execution layer. This includes: * Order placements, cancellations, and modifications * Trade fills and executions * Position opens, closes, and liquidations * Balance updates from trading activity * Funding rate payments These transactions are processed by the Strike node in real time and do not touch the underlying blockchain. This is what enables the exchange to operate at the speed and throughput required for derivatives trading. #### Settlement Layer (Cardano & EVM Chains) The underlying blockchain is used exclusively for custody and settlement: * **Deposits** — Funds are locked in on-chain locker contracts, verified by the validator network, and credited on the execution layer. * **Withdrawals** — The node constructs and submits on-chain transactions to release funds from the locker contract to the user's wallet. * **Custody** — All user funds are held in auditable smart contracts on the respective blockchain. The execution layer never takes custody — it only tracks balances. This means every dollar on the platform is backed by assets locked in on-chain contracts, verifiable by anyone. ### Deterministic Execution The Strike node is designed to be fully deterministic. Every message — whether an order, deposit, withdrawal, or liquidation — is assigned a nonce before processing. Nodes process messages strictly in nonce order, ensuring that: * Given the same input stream, any node will produce the same output state * Account balances, order books, and positions are always consistent * The state can be independently verified ### Roadmap As the protocol matures, the Strike node will be open-sourced, allowing independent operators to: * **Run their own nodes** — Independently verify every trade, liquidation, and balance update by replaying the deterministic transaction log. * **Validate transactions** — Confirm that the execution layer state matches what is expected from the input stream. * **Participate in consensus** — Contribute to the validator set that confirms state transitions and signs settlement transactions. The goal is a fully decentralized execution layer where no single entity controls trade processing — while maintaining the performance users expect from a modern derivatives exchange. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.strikefinance.org/perpetuals/strike-node.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.