DeFi Protocol Money on Chain, Bitcoin (BTC) side chain, RSK-based stable lending and issuer platform, announced on Wednesday the launch of TEX, an automatic order-based token exchange platform – with a unique design.
Instead of being immediately available, requests are processed in batches at slightly varying intervals of a few minutes. Each execution, called a tag, assigns blockchain requests.
Each trade that takes place at a particular brand is executed at the same average price among all orders placed by traders. Specific orders submitted by users indicate the maximum or minimum acceptable price. For example, a $ 18,000 limit order to sell bitcoins will not work if the average price is $ 17,900.
Max Kargoza, CEO of Money on Chain, explained to Cointelegraph that the system also uses an oracle system for more precise control. Through what are called market maker bids, traders express the price at a specified percentage, corresponding to the reference price that Oracle received. This ensures that orders keep track of price changes that occur between characters.
The system’s design was inspired by London Spot Fix, a gold price engine where the Gold Price Committee trades twice a day.
Automated market makers like Uniswap are often seen as a necessity in light of the poor performance of blockchain-based systems. When asked if these concerns motivated TEX’s design, Karjuzaa replied:
“No, the main reason for the adoption is to find a reasonable price. The method used by TEX is a way to avoid pre-competition and ensure that a reasonable price is found even with low volume.
Initial commissioning and pricing are often seen as major problems on AMM exchanges, but Carjuzaa also believes that the system “requires much less liquidity to operate.” As for the liquidity itself, he argues that AMM will have a higher glide compared to TEX. This feature is “particularly important in the new network and contributes to the growth of organic liquidity.”