A brief analysis of the new protocol CCA jointly released by Uniswap and Aztec

Author: Zhixiong Pan

Let's talk about the new protocol CCA jointly released by Uniswap and Aztec, which stands for “Continuous Clearing Auction.” It is specifically designed for price discovery and liquidity initiation for new assets. After the auction process is completed, the project team can import the raised funds and tokens into Uniswap v4, connecting to the secondary market for trading.

The core demand of this agreement is still to solve the problem of “how to price new assets.” Historically, there have been many approaches: team airdrops (equivalent to giving away for free), Dutch auctions, fixed price sales, as well as LBP, Bonding Curve, and so on. Essentially, they all involve “using some mechanism to sell a portion of the tokens to the earliest participants.”

But from Uniswap's perspective, these existing mechanisms each have their pitfalls: some have very random pricing, some are extremely time-sensitive, and some cannot provide continuous liquidity. Therefore, they hope that CCA can balance two things at the same time: relatively fair price discovery and smooth, sustainable liquidity initiation.

Essentially, CCA is a protocol independent of Uniswap v4, serving as a complete set of issuance and pricing frameworks. However, it can connect with the AMM core through Uniswap v4's hooks mechanism, especially after the completion of the CCA auction, automatically injecting liquidity into Uniswap v4's smart contracts.

What does that have to do with Aztec? Aztec's involvement in this matter is actually very deep: they not only participated in the mechanism design of CCA, but also became the first project to use CCA for token auctions. In addition, the CCA protocol itself can also support KYC/compliance capabilities. Aztec's auction this time used an identity verification feature called ZKPassport, which is a project within the Aztec ecosystem, developed using their Noir language, and completed compliance checks through zero-knowledge proofs without exposing user privacy details.

Returning to CCA, it is not a “one-size-fits-all” solution with a set of fixed rules, but rather provides a configurable auction framework. It can roughly be broken down into the following steps:

1. Configuration Phase: The auction initiator first sets the rules on the blockchain, such as the start and end time, how many “rounds” or time slots the auction is divided into, the proportion of tokens released in each time slot, the floor price, whether a whitelist/identity verification is needed, and how to inject liquidity into Uniswap v4 after the auction ends, etc.
2. Bidding Stage: During the auction, participants can place bids at any time. Each bid includes two parameters: how much money to invest and the maximum acceptable unit price. Participants can also continue to add or adjust bids, with each order being independently recorded.
3. Phased Distribution: The system will automatically distribute a bid across the remaining “release periods”. Therefore, the earlier the bid, the more time periods you can participate in, increasing the chance to participate in more rounds of settlement.
4. Settlement Phase: In each round, the system will accumulate all valid bids for that round, and then use a unified rule to determine a price that can sell all the tokens to be released in that round. This price becomes the final transaction price for that round. All bids with max_price equal to or higher than this price will receive their corresponding shares according to the rules in that round.
5. Conclusion: When all rounds are finished, the entire auction is declared closed. Participants can collect the tokens they have obtained as well as the portion of funds that were not transacted; the protocol will inject the raised assets and the other side of assets prepared by the project party into Uniswap v4 according to the previously agreed strategy, officially opening the liquidity pool for the secondary market.

I think it is more like slicing the traditional “one-time auction” time: it no longer clears all at once at a specific moment, but rather breaks a large round into multiple smaller stages, allowing the price and game to unfold over the timeline. This is also the reason why it is named “Continuous Clearing Auction.”