DeFi protocol Cash on Chain, a lending platform and stablecoin issuer primarily based on Bitcoin (BTC) sidechain RSK, introduced Wednesday the launch of TEX, an automatic token swap platform primarily based on an order e-book — with a singular twist.
As a substitute of being out there instantaneously, orders are processed in batches in response to 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 value between all orders submitted by merchants. Restrict orders submitted by customers point out the utmost or minimal acceptable value. For instance, a restrict order to promote Bitcoin for $18,000 won’t be triggered if the common value is $17,900.
Max Carjuzaa, CEO of Cash on Chain, defined to Cointelegraph that the system additionally makes use of an oracle system for extra fine-tuned management. With so-called market maker orders, merchants categorical a value with a sure share offset from the reference fee obtained by the oracle. This ensures that the orders will monitor the modifications in value occurring between ticks.
The design of the system was impressed by the London Spot Repair, a pricing mechanism for gold the place a committee deliberates on the worth of gold two instances per day.
Automated market makers like Uniswap are sometimes seen as a necessity in mild of the sluggish efficiency of blockchain-based programs. When requested if these considerations drove the design of TEX, Carjuzaa replied:
“No, the first cause it was adopted is honest value discovery. The tactic used within the TEX is a approach to keep away from front-running and guarantee honest value discovery, even at low quantity.”
Entrance-running and value discovery are sometimes thought-about main points in AMM exchanges, however Carjuzaa additionally believes their 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 vital in a brand new community, and allows natural liquidity development.”