Lending startup Money on Chain, based on Bitcoin's second-layer solution RSK, has launched a new decentralized exchange called TEX, where users can trade RSK tokens.
Money on Chain, an Argentine startup, recently announced the launch from a decentralized exchange (DEX) called TEX, an automated P2P exchange solution where RSK users will be able to exchange their platform tokens, such as RIF Token (RIF), RSK Smart Bitcoin (RBTC) and the Dollar on Chain (DoC), the stablecoin from the company backed by a Bitcoin derivative.
According to release, this exchange is designed to allow peer-to-peer (P2P) transactions, guaranteeing control of the assets in the hands of the users themselves at all times. Likewise, in TEX users will be able to exchange their tokens at fair prices, since the platform integrates oracles to access the prices of the tokens in the market, which are constantly updated. On the other hand, TEX also guarantees a percentage profit for market makers and also allows users to place their purchase and sale orders by establishing the limit they wish to execute the operations.
Money on Chain is a lending startup and token issuing company based on the Money on Chain platform. RSK, the second layer solution designed to enable the creation of smart contracts or smart contracts and instant payments within the blockchain de Bitcoin, but without changing anything in the original operation of this network.
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TEX Features
TEX integrates functionalities that make it unique among all the decentralized exchanges on the market. Instead of processing users' orders and trades instantly, TEX integrates the limit order function, which allows users to set a maximum and minimum limit for processing buy or sell orders within the exchange. In this way, TEX stores orders for a time interval of a few minutes, and processes them when the users' buy or sell specifications are met.
Limit order to buy or sell
“A limit order ensures that you will buy or sell at the expected price or better.”
Money on Chain explains that if two users set a buy order for 1 BTC at $10.000 USD and a sell order for 1 BTC at $9.800 USD, both trades will be executed within a single tick (as Money on Chain calls each order execution within TEX) since the exchange will perform an average calculation for both orders at the initially set prices.
In this example, the average order price is $9.900 USD, which is within the parameters set by users, so, "He who buys will not spend more than the maximum he was willing to spend, nor will he who sells receive less than the minimum he expected to obtain."”, the company explains. Likewise, Money on Chain points out that if the average price of a tick is below the price set for an order, it will not be executed. For example, if a sell order for 1 BTC is set at $9.800 USD and the average of the orders is $9.700 USD, the sell order will not be executed, guaranteeing the user's demands.
Inspired by The London Gold Fix
Money on Chain also explains that the mechanism it used as inspiration for the design of this methodology is the gold price negotiation mechanism. The London Gold FixIn this way, the exchange can establish and guarantee a fair price for each of the tokens traded on its platform.
Limit order for market makers
Money on Chain also established an order system to ensure profits for market makers and encourage participation within the exchange. As the company explains, this order is a “special type of limit order,” but with the difference that the market maker can set a percentage difference with a fair price, which comes from the oracles, and which will reflect the market maker’s profit.
For example, if the market maker sets a buy order for 10.000 rBTC DOC with a 0,5% difference in price, and the price of 1 BTC is $10.000 USD, your limit order will exit at a price of $9.950 USD. The order price will also be automatically adjusted within the set parameters if the BTC price fluctuates in the market.
“If the price of BTC goes up or down, your order price will automatically adjust to reflect the price of bitcoin minus 0.5%.”
Another feature that TEX integrates is that if the oracles are not available to reflect fair prices of the tokens in the market, then the exchange will take as a reference the price used in the last tick, or in the last order execution carried out.
Fees and transaction amounts
The minimum amount for a transaction in TEX is $10 USD, equivalent to the RSK token being exchanged, and users will have to pay 2 types of commissions, although they are quite affordable.
The first is a Fixed commission fee of $0,5 USD (50 cents) for each transaction to be made, regardless of the amount involved in the order. The second is a variable commission rate of 0,1% of the total order without the fixed fee. That is, if a user processes an order for $10 USD, $0,5 USD of fixed fee is deducted, and from the remaining $9,5 USD 0,1% is deducted, which would be equal to $0,0095 USD.
In total, the user would be paying a commission fee of $0,5095 USD for an order of $9,4905 USD.
A DeFi marketplace on RSK
TEX's functionality allows it to establish an order market for the exchange of tokens in a decentralized manner, where users and market makers can take advantage of a fair price, even with low order volume.
TEX is intended to expand the financial services offered by the RSK platform, which recently integrated a new two-way ETH-BTC bridge to connect the products of the blockchain Ethereum with users of the Bitcoin network, allowing the Bitcoin community to enjoy products DeFi within this network.
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