Review on DEX by Merve Duru
DEXToken about
Although decentralized finance was born on the basis of the free market, there are still possibilities of "manipulating" trends: have you ever heard of "whales"? The so called "whales" are the holders of a large amount of money who can change the price of any asset as they wish, simply by selling or buying, hunting orders from retail traders and creating liquidity where and when needed.
๏ปฟ
We can define this behavior as over-speculation: if you have a lot of Tokens and you decide to make the price fall, it is enough to sell them all: the price will begin to fall and adding fear from small investors that will sell too to limit losses, creating a domino effect.
๏ปฟ
With the lower price you can buy a lot more coins than before and the game resumes!
๏ปฟ
This creates enormous price volatility.
๏ปฟ
In addition to the "whales", the volatility of the price in the free market is also given by trading on arbitrage.
๏ปฟ
In the crypto environment, the first study aimed at limiting the volatility of cryptocurrencies dates back to 2016 and Tether (currently with more than 13B $ dollars capitalization) described how it was possible to create a fiat currency on the Blockchain. Tether is a Token of the Ethereum blockchain that is pegged to the United States Dollar with a ratio of 1: 1. Since the price is bound to the dollar, the price is not supposed change: this is how the first Stable-coin was born and many more came in the last years with USDJ, BUSD, PAX, GEMINI and more to come.
๏ปฟ
The philosophy of the DEXToken Protocol is based on these foundations: limiting the volatility of the crypto market achieving the possibility to define the price of a Token in a decentralized manner, without whales and without other Stable-coins.
๏ปฟ
Everything is developed on the studies of the Flowchain foundation, which has established a strong correlation between the native Blockchain of the token and the exchange price.
๏ปฟ
The protocol consists of 2 subsets, the DEXToken and the off-chain issue. Everything must be supported by a Governance Token, the so-called DEXG.
๏ปฟ
This token brings benefits in terms of profit to the holders since they will have a reward as a percentage of the profits derived from trading the DexToken.
๏ปฟ
A sort of Staking, something also similar to what Bankera is trying to do with its own Exchange.
๏ปฟ
The profits of the DEXG Stakers originate from the fees of the Speculative AMM.
๏ปฟ
But to make this principle feasible, how did they plan to proceed?
๏ปฟ
They decided to exploit some typical stock market dynamics, first of all the Automated Market Markers which is used to contain the volatility of a stock.
๏ปฟ
DEXToken renamed it Automated Market Markers Speculative
๏ปฟ
Automated Market Markers are nothing more than smart-contracts that create a liquidity pool of ERC-20 Tokens that are automatically exchanged by an algorithm instead of an order book.
๏ปฟ
This effectively replaces an order book with a price limit and assets can be automatically exchanged with the last price in the pool.
๏ปฟ
For this purpose, the DEXToken team has set up the speculative AMM
๏ปฟ
As it is easy to guess, through this procedure a reliable token price can be obtained only if the smart-contracts are on-chain and on a public BC. Furthermore, since a Smart-contract controls and manages the protocol, the price range is always controlled in case there are unjustified large sales volumes.
๏ปฟ
๏ปฟ
We can define this behavior as over-speculation: if you have a lot of Tokens and you decide to make the price fall, it is enough to sell them all: the price will begin to fall and adding fear from small investors that will sell too to limit losses, creating a domino effect.
๏ปฟ
With the lower price you can buy a lot more coins than before and the game resumes!
๏ปฟ
This creates enormous price volatility.
๏ปฟ
In addition to the "whales", the volatility of the price in the free market is also given by trading on arbitrage.
๏ปฟ
In the crypto environment, the first study aimed at limiting the volatility of cryptocurrencies dates back to 2016 and Tether (currently with more than 13B $ dollars capitalization) described how it was possible to create a fiat currency on the Blockchain. Tether is a Token of the Ethereum blockchain that is pegged to the United States Dollar with a ratio of 1: 1. Since the price is bound to the dollar, the price is not supposed change: this is how the first Stable-coin was born and many more came in the last years with USDJ, BUSD, PAX, GEMINI and more to come.
๏ปฟ
The philosophy of the DEXToken Protocol is based on these foundations: limiting the volatility of the crypto market achieving the possibility to define the price of a Token in a decentralized manner, without whales and without other Stable-coins.
๏ปฟ
Everything is developed on the studies of the Flowchain foundation, which has established a strong correlation between the native Blockchain of the token and the exchange price.
๏ปฟ
The protocol consists of 2 subsets, the DEXToken and the off-chain issue. Everything must be supported by a Governance Token, the so-called DEXG.
๏ปฟ
This token brings benefits in terms of profit to the holders since they will have a reward as a percentage of the profits derived from trading the DexToken.
๏ปฟ
A sort of Staking, something also similar to what Bankera is trying to do with its own Exchange.
๏ปฟ
The profits of the DEXG Stakers originate from the fees of the Speculative AMM.
๏ปฟ
But to make this principle feasible, how did they plan to proceed?
๏ปฟ
They decided to exploit some typical stock market dynamics, first of all the Automated Market Markers which is used to contain the volatility of a stock.
๏ปฟ
DEXToken renamed it Automated Market Markers Speculative
๏ปฟ
Automated Market Markers are nothing more than smart-contracts that create a liquidity pool of ERC-20 Tokens that are automatically exchanged by an algorithm instead of an order book.
๏ปฟ
This effectively replaces an order book with a price limit and assets can be automatically exchanged with the last price in the pool.
๏ปฟ
For this purpose, the DEXToken team has set up the speculative AMM
๏ปฟ
As it is easy to guess, through this procedure a reliable token price can be obtained only if the smart-contracts are on-chain and on a public BC. Furthermore, since a Smart-contract controls and manages the protocol, the price range is always controlled in case there are unjustified large sales volumes.
๏ปฟ
We can define this behavior as over-speculation: if you have a lot of Tokens and you decide to make the price fall, it is enough to sell them all: the price will begin to fall and adding fear from small investors that will sell too to limit losses, creating a domino effect.
๏ปฟ
With the lower price you can buy a lot more coins than before and the game resumes!
๏ปฟ
This creates enormous price volatility.
๏ปฟ
In addition to the "whales", the volatility of the price in the free market is also given by trading on arbitrage.
๏ปฟ
In the crypto environment, the first study aimed at limiting the volatility of cryptocurrencies dates back to 2016 and Tether (currently with more than 13B $ dollars capitalization) described how it was possible to create a fiat currency on the Blockchain. Tether is a Token of the Ethereum blockchain that is pegged to the United States Dollar with a ratio of 1: 1. Since the price is bound to the dollar, the price is not supposed change: this is how the first Stable-coin was born and many more came in the last years with USDJ, BUSD, PAX, GEMINI and more to come.
๏ปฟ
The philosophy of the DEXToken Protocol is based on these foundations: limiting the volatility of the crypto market achieving the possibility to define the price of a Token in a decentralized manner, without whales and without other Stable-coins.
๏ปฟ
Everything is developed on the studies of the Flowchain foundation, which has established a strong correlation between the native Blockchain of the token and the exchange price.
๏ปฟ
The protocol consists of 2 subsets, the DEXToken and the off-chain issue. Everything must be supported by a Governance Token, the so-called DEXG.
๏ปฟ
This token brings benefits in terms of profit to the holders since they will have a reward as a percentage of the profits derived from trading the DexToken.
๏ปฟ
A sort of Staking, something also similar to what Bankera is trying to do with its own Exchange.
๏ปฟ
The profits of the DEXG Stakers originate from the fees of the Speculative AMM.
๏ปฟ
But to make this principle feasible, how did they plan to proceed?
๏ปฟ
They decided to exploit some typical stock market dynamics, first of all the Automated Market Markers which is used to contain the volatility of a stock.
๏ปฟ
DEXToken renamed it Automated Market Markers Speculative
๏ปฟ
Automated Market Markers are nothing more than smart-contracts that create a liquidity pool of ERC-20 Tokens that are automatically exchanged by an algorithm instead of an order book.
๏ปฟ
This effectively replaces an order book with a price limit and assets can be automatically exchanged with the last price in the pool.
๏ปฟ
For this purpose, the DEXToken team has set up the speculative AMM
๏ปฟ
As it is easy to guess, through this procedure a reliable token price can be obtained only if the smart-contracts are on-chain and rthermor
๏ปฟ
Pros
- easy purchase
- 24/7 transaction convenience
Cons
- weak security network
