DeFi protocol Cash on Chain, a lending platform and stablecoin issuer based mostly on Bitcoin (BTC) sidechain RSK, introduced Wednesday the launch
DeFi protocol Cash on Chain, a lending platform and stablecoin issuer based mostly on Bitcoin (BTC) sidechain RSK, introduced Wednesday the launch of TEX, an automatic token swap platform based mostly on an order ebook with a singular twist.
As an alternative of being obtainable instantaneously, orders are processed in batches in accordance with a barely variable interval of some minutes. Every execution, referred to as a tick, matches the orders submitted to the blockchain.
Every commerce occurring in a given tick is carried out on the similar common worth between all orders submitted by merchants. Restrict orders submitted by customers point out the utmost or minimal acceptable worth. For instance, a restrict order to promote Bitcoin for $18,00zero won’t be triggered if the typical worth is $17,900.
As Max Carjuzaa, CEO of Cash on Chain, defined to Cointelegraph, the system additionally makes use of an oracle system for extra fine-tuned management. With so-called market maker orders, merchants categorical a worth with a sure share offset from the reference fee obtained by the oracle. This ensures that the orders will observe the adjustments in worth occurring between ticks.
The design of the system was impressed by the London Spot Repair, a pricing mechanism for gold the place a committee decides on the worth of gold two occasions per day.
Automated market makers like Uniswap are sometimes seen as a necessity in gentle of the sluggish efficiency of blockchain-based programs. When requested if these issues drove the design of TEX, Carjuzaa replied:
“No, the first cause it was adopted is truthful worth discovery. The strategy used within the TEX is a solution to keep away from front-running and guarantee truthful worth discovery, even at low quantity.”
Entrance-running and worth discovery are sometimes thought of main points in AMM exchanges. However Carjuzaa additionally believes the system “wants a lot much less liquidity to function.” For a similar liquidity, he claims AMMs could have extra slippage in comparison with TEX. This profit is “particularly essential in a brand new community, and allows natural liquidity development.”