A bit of history
The Great Depression of the 1920s, the so-called "Jazz Age" is well known. Banks and politicians influenced market rules during that period. This still happens since the money is not people's money but comes from central banks which allocate a certain amount of money to governments.
For this reason, decentralized funds are needed in exchange for decentralized funds to allow greater grades of independence from banks.
Although decentralized finance was born on a free market basis, there is still the possibility of a “manipulation” trend: have you ever heard of “whales”? The so-called "whales" are the holders of huge sums of money who can simply sell or buy, hunt orders from retailers, and change the price of any asset at will as they see fit.
We can define this behavior as over-speculation: if you have a lot of tokens and you decide to lower the price, they are all enough to sell: the price will start to fall and increase the fear of small investors that will sell too much will domino To limit losses by creating effects.
With a lower price you can buy a lot more coins than before and the game starts again!
This creates a lot of price volatility.
In addition to "whales", price volatility in the free market is also traded through arbitration.
In the crypto environment, the first study aimed to limit cryptocurrency volatility by 2016 and Tithar (currently with a capital of more than বি 13B) described how it was possible to create fiat currencies in the blockchain. Tether is an Ethereum blockchain token with a 1: 1 ratio to the US dollar, since the price is tied to the dollar, the price change is not expected: this is how the first stable coin was born and many more in recent years USDJ, BUSD, PAX, GEMINI and Came up with many more.
The philosophy of the Dextoken protocol is based on this: Limiting the volatility of the crypto market makes it possible to determine the price of a token in a decentralized way, without the whale and without other stable-currencies.
Everything evolved on the study of the Flowchain Foundation, which established a strong relationship between the native blockchain of tokens and the exchange rate.
The protocol consists of 2 subsets, dextoken and off-chain issue. Everything must be supported by the governance token, the so-called DEXG.
This brings benefits to the token holders in terms of profit as they will be rewarded as a percentage of the profits from the dextoken business.
A kind of stacking, something similar to what the bunkers are trying to do with its own exchange.
The profits of Dexgi Stackers start from the speculative AMM fee.
But how did they plan to move forward with this policy?
They decided on some common stock market dynamics, first automated market markers that are used to keep a stock volatile.
Dextoken's name has been changed to Automated Markets Spective Tive
Automated market markers are nothing more than smart-contracts that create a liquidity pool of ERC-20 tokens that are automatically exchanged by an algorithm rather than an order book.
This can effectively replace an order book with a price limit and the assets can be automatically exchanged with the final price in the pool.
For this purpose, the Dextoken team has set up a hypothetical AMM
As is easy to guess, this method will only allow reliable token prices to be found on smart-contracts on-chain and in a single BC. Moreover, since a smart-contract controls and manages protocols, the price range is always controlled in the case of unreasonably large sales volumes.
The Dextoken ecosystem is based on 6 points:
1 - Universal price.
The Universal Price introduces two revolutionary concepts: the user base and the mathematical model of the Universal Price.
The result of the correlation of user base 3 variables: number of mines, total number of transactions and registered wallet addresses. This variable, known as NT, will contribute to the calculation of the mathematical model of the Universal Prize.
The mathematical model of the Universal Price is the result of research conducted by the Flowchain Foundation, where a formula is defined where we can find the following variables:
We call PTK the universal value of tokens;
Number of users (user base);
St. transaction number;
During the production of the platform;
M conventional coins.
It has the following prices:
2 - Estimated ADM.
Practicing AMM arbitration through precise price formulas controls prices in a well-defined range, with the help of tokens produced in the business and by controlling tokens.
3 - Off chain token
A unique feature of the world's dextoken ecosystem is the possibility of processing off-chain tokens: upon receipt of the token, a smart-contract initiates its validation and then passes it on-chain to the dex blockchain. A kind of double level to increase speed and reduce transaction costs.
4 - AMM for universal price calculation of off-chain tokens
Once the token is on-chain, the hypothetical AMM can proceed with the application of the universal price calculation formula.
5 - Stacking
As I described above, Government Token (DXG) brings benefits to owners through transaction fees; They can contribute to mutual evolution.
In the figure below we can understand how stacking works and above all how to control the price even after mining production is over: the system will only move forward with a blaze.
But beware, the invention is right here: the burn is not carried at once when a large quantity of 'x' will be placed on the market.
Everything is operated by an algorithm that intervenes by excluding only the remaining tokens of the following stacking cycle; Thus, the following cycle cannot do more damage than the previous one and if this happens, it takes the mine of the previous cycle as the basis.
As a result, it is destroyed by excess burns.
That way you have complete control of each situation. I dare say bright !!!
6 - Products
Flowchain will provide the following products with this protocol:
- Exchange of tokens;
- Decentralized exchange;
- Stocking pool
An important project, of course ambitious, but will be followed with some attention!
Dextochendefined
