Superconducting exchange introduction and its advantages
Superconducting(SuperCon) exchange function of the MOV protocol is released. People can check it on Bycoin Wallet (download link: http://bycoin.im/)
Superconducting exchange is an important step for the MOV protocol to improve the layout of the MOV protocol in the Defi field after the magnetic exchange and lightning exchange.
SuperConducting exchange can deploy customized market making, automatic market making, it will vastly increase the liquidity of Asset in MOV.
At present, the first step of “MOV SuperCon” is to realize the matching pool of the three stable coins of DAI/USDT/USDC and implement the free exchange of these three stable coins.
How to use Superconducting Exchange:
1, Download or upgrade to the latest version Bycoin App （http://bycoin.im/）
2, Click “MOV” and click “SuprCon Ex”, currently USDC, DAI, and USDT exchange pairs are online, trading rate 1:1, people can make Superconducting Exchange quickly. And also they can Deposit to Superconducting pool to earn the profit.
Want to know more details of the Superconducting exchange?
We will give you 5 aspects explanations regarding Superconducting exchange: “Why MOV need to have a Stable coin exchange?”, “Architecture of Superconducting, and what’s the core role.”, “Superconducting exchange rate and the price mechanism.”, “Compared with a centralized exchange, what are the advantages of MOV?”, “How to participate in Superconducting Exchange and get profit.”
1, Why MOV need to have a Stable coin exchange?
People know DeFi before should know the important role of stable coin for DeFi. According to the statistics of the crypto data platform Messari, the current total market value of stable coins has exceeded 11.2 billion US dollars, an increase of 120% in five months. Among the mainstream stable coins, USDT has convenient deposits and withdrawals and a wide range of uses. And the DAI/USDC trading pair is more compliant. Users have different needs for different types of stable coins in different scenarios.
Regarding stable coin trading, centralized Exchange is obviously not good as DeFi platform. DeFi platform is more convenient, safe, transparent for stable coin trading.
To implement the efficient exchange of stable coins will be an important step in the milestone of MOV’s DeFi ecology.
2, Architecture of Superconducting, and what’s the core role.
Inside the architecture, there are three key roles:
Traders:
Traders can use SuperCon to exchange a stable coin to another stable coin. Like USDT to DAI. SuperCon can make it fast, convenient and less cost.
Arbitrageurs:
Arbitrageurs are kind of similar to traders, but they want to trade to make a profit because the exchange rate is changing.
No matter traders or Arbitrageurs, they trade and it will have a trading fee, the trading fee will be distributed to another role: Liquidity provider or Users who deposit coin in the pool.
Liquidity provider or Users who deposit coin in the pool:
They are helping with the liquidity, deposit stable coin into Superconducting Pool can provide very good liquidity for the whole system. As a return, the Superconducting system will distribute trading fees to those who providing liquidity.
3, Superconducting exchange rate and the price mechanism.
SuperCon exchange’s price and the rate are not similar to traditional centralized matching mechanisms, they depend on Arbitrageur‘s action. Once the exchange rate has many gaps between SuperCon with the external market. The arbitrageur will quickly carry out the arbitrage operation, exchange the deviation token at a low cost on the floor, and then sell it at a high price in the market with the normal exchange rate. While earning arbitrage gains, it also balances the exchange rate inside the Superconducting pool to be close to the real exchange rate external market.
For example, There are 10 USDC and 10 DAI in the USDC/DAI pool. If Someone (we call him A) invests US$10 and participates in the market making, A invests 10 USD worth asset (5 USDC and 5 DAI), the exchange ratio in the pool will not change. If the A invested 10USDC, the ratio of USDC: DAI in the pool will become 20:10, and the number of DAI will become less. The exchange price becomes higher, which creates an arbitrage space between the superconducting exchange rate and the external market exchange rate, which will attract external arbitrageurs to buy a relatively lower price DAI from the external market, and deposit to SuperCon pool to exchange USDC, and ultimately maintain the exchange rate in the pool around 1:1.
4, Compared with a centralized exchange, what are the advantages of MOV?
Most people normally use a centralized exchange to do exchange and asset custody. So what advantages does MOV’s superconducting exchange have over the centralized exchange model?
The most fundamental advantage: low slippage, low cost.
What is Slippage?
Slippage refers to the difference between the expected price of a trade and the price at which the trade is executed. Let’s take an example when you want to sell 100BTC in exchange, and the rate for BTC vs USDT is 9000:1, but if the buy order is less than 10 BTC. If you want to sell 100BTC, then you have to sell to the buyers which they gave a lower rate. As a result your trading rate for BTC maybe 8980. So the slippage here is 9000–8980 = 20. So the smaller the slippage, the lower traders’ cost.
The superconducting exchange is different from the order matching mechanism in a centralized exchange, adopting the Constant Function Market Maker model.
Superconducting exchange can have a very competitive smaller slippage compare with centralized Exchange. For example, trading 200,000 USD in a 500,000 USD reserve pool only cause 0.29% slippage. It’s a lot better than any centralized Exchange.
And Superconducting Exchange set slippage protection within the range of 5% to 10%, it makes sure a very large amount of trading can be protected from too much cost.
5, How to participate in Superconducting Exchange and get profit.
(1) Become a Liquidity provider
Deposit your asset in the reserve pool, so you can share the trading fee. The trading fee is 0.05%, Users who trade Token X for Token Y, the trading fee will be charged by Token Y. For example, if someone has 10000USDC to exchange for 10000DAI, and 5 DAI will be charged as a trading fee. And all the trading fees will be distributed to Liquidity providers. And if you want
（2） Making arbitrage when there is a price difference
When a difference is found during the exchange of stable coins, you can participate in arbitrage in a timely manner. For example, 1USDT=1.06USDC, you can buy USDC from the external market and trade in the SuperCon reserve pool to earn a profit.
（3）Participate in the superconducting exchange share 8888 BTM Everyday
If you are not familiar with market-making and arbitrage, you can still share reward by participating superconducting exchange from June 23 to June 30.
