Similar to a traditional uni-swap style exchange, the Void Defi Dex follows some common uni-swap principles. However, the Void Dex has a few unique differences compared to most typical uni-swaps.
This post will cover all the basics of the Void Defi Dex. If you still have any questions, feel free to join our telegram and ask us anything you like. (Links at the bottom of this post)
What does Void defi have in common with Uni-swaps ?
At its core, the Void Dex is a typical uni-swap exchange. Where the price of each exchange pair is dictated by the amount of liquidity on each side of the pair. This is worked out using the simple equation, (x * y = k). The price of each Void Dex pair will always be at a particular point lying on the resulting curve of this equation.
This (x * y = k) formula is important to understand when using the Void Dex, as it determines the price for each Dex pair.
As (x) multiplied by (y) must always equal the same value (k), the resulting curve depicts all possible exchange rate values. The red points on this curve, will represent the exchange rate at each state of liquidity.
As an example, lets say in the above graph, Token B is Void and Token A is TRX (or any of the other Void Dex pair)
An increase of Void in the liquidity pool
Lets imagine someone uses the VOID/TRX dex pair and sells a bunch of VOID for TRX. The Dex pair now has less TRX and more VOID in the liquidity pool.
This results in the point on the above curve moving. In this example the point would move to the left, resulting in an increase in price for the VOID/TRX pair. (Price goes up)
An increase of TRX in the liquidity pool
Lets imagine someone uses the VOID/TRX Dex pair and buys a bunch of VOID for TRX. The Dex pair now has less Void and more TRX in the liquidity pool.
This results in the point on the above curve moving. This time, moving to the right. Resulting in a decrease in price for the VOID/TRX pair. (Price goes down)
Another important metric to remember is Slippage
Slippage is the result of the above curve moving to far in either direction. If there is to much or to little liquidity on one side of the Dex pair and someone swaps a large sum, slippage will occur.
An example would be. If the price of VOID is 1 TRX and someone sells a large sum of VOID for TRX. The price will slip up and the value per VOID will drop, resulting in the user getting less TRX per VOID. (The price point will move Left on the above curve)
So what did Void change ?
The Void Defi Dex has liquidity Provider pools, just like uni-swaps do. The difference? Void has a set of anti manipulation measures in place, these measures help protect the liquidity providers and the over all liquidity of each Dex pair.
Unlike traditional uni-swaps, the Void Defi Dex has the following measures in place:
- When users deposit or withdraw any liquidity, they are locked out for 4 hours and can not make another deposit or withdrawal.
- Each Dex pair has a set of milestone limits to reach. These milestones dictate the deposit and withdrawal limits for each liquidity provider pool respectively. When a milestone is reached, the limit automatically adjusts. (Note: This can move up and down if the liquidity pool hangs around the same milestone point)
- Each Dex pair has a Dynamic 1 Hour limit for deposits and withdrawals. This limit applies to the whole liquidity pool, along with a capped withdrawal and deposit limit for that pool.
- When any user deposits or withdraws liquidity, the 1 hour timer starts. This timer counts down until it hits 0 and will only restart after a new deposit or withdrawal is made. If no deposits or withdrawals occur, the timer stays inactive.
- The withdrawal and deposit limits for the above timer, is based on the following. [2.5% of the Current Liquidity pool size + the current Liquidity Provider transaction limit] This limit is dynamic and changes in real time.
- If this above Limit is reached in either direction (deposits or withdrawals), the Liquidity Provider pool will lock in that direction, until the current timer ends. ( i.e If users withdraw and hit the withdrawal limit, withdrawals will lock until the timer ends but users can still deposit)
Note: The Liquidity Provider pool can also balance withdrawals and Deposits during this timer. Doing so will avoid hitting a lock out in either direction.
So what benefits do liquidity providers get ?
If you provide liquidity to any of the Void Dex pairs, the following fee’s and rewards apply:
- All deposits and withdrawals to the liquidity pool incur a 5% fee. This fee splits and sends 4.5% to the current liquidity providers in the pool as divs. The other 0.5% is a service fee to manage the dex.
- A 0.3% LP fee is charged with every swap made. This fee is split to all the current Liquidity Providers of that dex pair. This fee is applied in both directs, meaning liquidity providers earn both VOID and the Token they provide liquidity for.
- Future void dapps that utilise the Void dex, also contribute to the the liquidity providers rewards. One such dapp is the Void Bank, where X% is sent to the respective liquidity pools.
More info on Void bank can be found here: https://link.medium.com/wM2EgQMb76
All of the above rewards are accumulated automatically and in real time, meaning liquidity providers can claim their earnings at anytime.
What else makes the Void Defi Dex so different?
Because Void is a Deflationary token, all Void transactions burn 3% of the token. For the Void Dex, this burn on buys and sells actually helps increase the liquidity of each pair.
Because less void is going back into the liquidity pool of each pair, the price curve of (x * y = k) is always moving towards the left, increasing the value of the dex pair over time, while also building up liquidity of the token trading against void.
Naturally this results in a constant price cycle occurring, where users buy and sell their void to take advantage of the different in price.
That’s where Arbitrage trading between Dex pairs occurs
In the event that one of the available Dex pairs becomes unbalanced in either direction, the difference in price can be taken advantage of and rebalanced out by arbitrage traders.
As an example, if the VOID/USDT pair climbs to a price point deemed to high, compared to other Dex pairs. Users could buy cheaper void on the other dex pairs and sell it on the USDT Dex pair, to take advantage of the price difference.
All of this trading burns more and more Void, deflating the supply and reducing the amount of Void in circulation. We feel this is a perfect use case for a deflationary token. Hence, its the core of our Defi Dex.
For the Void Dev team, creating more Dapps that build on top of the Void Dex, is our main goal. With this in mind, the Void Dev team has plans to release even more amazing dapps in the future, so stay tuned to our social channels for all the latest news.
Finally, thank for taking the time to read this post. For a more in depth discussions on the principles of Voiddefi.io. Head on over to our Telegram chat found below.
- Void Dev Team
Main TG Chat: https://t.me/voidtoken
Announcements channel: https://t.me/VoidXannouncements
Tech Support chat: https://t.me/VoidBossTechSupport
Void Twitter: https://www.twitter.com/TrxVoid