The DeFi Money on Chain Protocol, A stable bitcoin issuer and credit platform based on Bitcoin’s RSK sidechain (BTC) announced on Wednesday the launch of TEX, an automated token swap platform based on an order book with a unique twist.
Instead of being available immediately, Orders are processed in batches at a slightly variable interval of a few minutes. Each execution, called a tick, corresponds to the commands sent to the blockchain.
Any trade that takes place on a given tick will be executed at the same average price among all orders sent by traders. L.The users’ limited orders indicate the maximum or minimum acceptable price. For example, a limit order to sell Bitcoin for $ 18,000 will not trigger if the average price is $ 17,900.
Max Carjuzaa, CEO of Money on Chain, told Cointelegraph that the system also uses an Oracle system for more precise control. In so-called market maker orders, traders express a price that deviates from the benchmark rate of the oracle by a certain percentage. This ensures that orders keep track of price changes that occur between ticks.
The design of the system was inspired by the London Spot Fix, a gold price mechanism in which a committee advises the gold price twice a day.
Automated market makers like Uniswap are often seen as a necessity given the slow performance of blockchain-based systems. When asked if these concerns influenced the TEX design, Carjuzaa replied:
“No, the main reason for acceptance is to discover fair prices. The method used in TEX is a way of avoiding the first execution and ensuring fair pricing even with low volumes. “
Pricing and early execution are often seen as major problems on AMM exchanges, but Carjuzaa also believes that its system “requires much less liquidity to function”. With the same liquidity, it means that MMAs will show more slippage compared to TEX. This advantage is “particularly important in a new network and enables organic liquidity growth”.