How to use Fairdex: A step-by-step guide to a DutchX bidder interface
Fairdex is a trading platform for ERC20 tokens built on the DutchX, Gnosis’ fully decentralized trading protocol. It allows users to place bids on auctions running on the DutchX, with no third-party risk, and no possibility of being front-run by miners or high-frequency traders.
Check out the DutchX explainer video or blog posts to learn more about the protocol’s underlying auction mechanism.
We’ve provided a short tutorial to help you understand how to use both the DutchX protocol and Fairdex platform. To make the most out of this tutorial, we recommend that you have the Gnosis Safe installed, and that you hold some ETH or tokens tradeable on the DutchX. MetaMask can also be used.
- Start by navigating to the Fairdex website. We recommend placing some trades using the Rinkeby Testnet version for practice before using the Mainnet version. In order to trade on Rinkeby, you must use MetaMask, and switch the network to Rinkeby Testnet.
2. Once you select Get started and accept our general terms of service, you will be directed to Fairdex’s homepage (pictured below). The navigation bar on the left will allow you to visit all available auctions, wallet settings, and your individual Magnolia (MGN) balance, and your associated Liquidity Contribution level. On top of the Auctions page, you can display the data of auctions depending on whether they are running, are scheduled, or have ended.
3. To start, please click on the Wallet button on the left column of the starting page. This screen shows the balance of all the currently tradable tokens held in your wallet. You must enable a token for trading on this page.
Next, select Enable for trading and confirm the transaction with either your Gnosis Safe or MetaMask wallet, shown below. (If you are a Gnosis Safe user, you will also need to confirm the transaction in the mobile app.)
4. After you’ve enabled the tokens you wish to trade, click the DEPOSIT button of the token you enabled (pictured below). This will deposit the given token into the DutchX smart contract and make it tradable. Please deposit at least the amount of tokens you want to use to bid in your desired auction, and confirm the transaction. If you deposit more than you want to trade, the tokens will simply remain in the DutchX smart contract. You may want to do this to save gas costs for your next transaction, and you can claim and withdraw tokens later.
Please note that you must both enable trading and deposit tokens before you can take part in an auction.
In this walkthrough, we use DAI as the example.
5. Now you are ready to bid. Navigate back to the Auctions page. Once again, you will see an overview of the auctions. In this example, we will bid DAI for WETH. Click on the BID button on the DAI > WETH section of the screen (pictured below).
You will then see the screen below, which gives a warning that the current price for this bid is 10% of the previous closing price. If you agree this price is in accordance reflects your willingness to pay, click on PROCEED.
The next screen will allow you to select a bid volume (pictured below). In this example, we are choosing to buy WETH with DAI. Our bid volume would be the amount of DAI we want to bid in exchange for WETH. The bid volume we use for this example is 2 DAI.
If you hold OWL, there will be an additional option (pictured below) in which you will be asked if you wish to pay half of the Liquidity Contribution with OWL. Each OWL can be used to pay up to half of the Liquidity Contribution and is worth 1 USD. Learn more about OWL here. If you select YES, go ahead and confirm the transaction on the Gnosis Safe.
After entering the volume you want to bid and deciding whether you want to use OWL, click on NEXT and then CONFIRM. You will be prompted to confirm the transaction with your wallet.
6. After a bid has been placed successfully, you can immediately claim a part of the auction. This is because bidders on the DutchX mechanism do the following: by placing their bid at a price in which they indicate the maximum amount of the buy token they are willing to trade for the sell token. If this bid does not buy the remaining auction sell volume, the auction will keep running. If it keeps running, the closing price will be lower than the bid that was placed, which in turn entitles the bidder to receive a greater quantity of the sell tokens, which can be claimed at any later point during the auction or after it ends.
To claim your tokens, click on the CLAIM button in the auction you took part in. You will see a small pop up window, indicating the amount to be claimed (pictured below). Click CLAIM once more and confirm the transaction with your chosen wallet.
You have now participated in an auction as a bidder! Your proceeds from the auction will stay in the DutchX smart contract and continue to be associated with your address, which you can use in future auctions. Please read the next step to learn how to withdraw funds from the DutchX smart contract.
7. If you want to transfer or spend the proceeds from the auction, go back to the Wallet page. You will see a WITHDRAW button under each available token in your wallet. You will be prompted to confirm the transaction with your wallet.
Remember that as a bidder, you can have a perception of price changes in an auction, and take into account at what price you are placing your bid. If you participate early, you might end up paying a high price, but if you participate too late, you could get left out of the auction. Make sure you place bids at a price that is right for you!
Fairdex is a Gnosis Ecosystem Fund grant winner. GECO aims to empower teams that wish to build on Gnosis protocols with funding, mentoring, and marketing. Visit the GECO page to learn more.
