Revolutionizing DeFi: Unfolding Secured Finance’s Unique Features (3)
Understanding the Itayose Method
Introduction
Welcome to the third installment of our series exploring the innovative features of Secured Finance, a groundbreaking platform in the DeFi (Decentralized Finance) space. After examining Zero Coupon Bond Trading and the Auto-Rolling Function, we now delve into the unique Itayose or pre-open market feature. As we continue to decipher Secured Finance’s distinctive tools, we reveal a new way to optimize your investment experience.
The Birth of a New Orderbook
Secured Finance’s Zero Coupon (ZC) bond market expires every quarter-end, ensuring an up-to-two-year maturity period, each currency has eight orderbooks. Once the nearest orderbook matures, the platform opens the eighth orderbook, approximating a two-year duration.
Seven days before the new orderbook starts trading, it becomes visible to users. They can place their orders, albeit only on one side — either to borrow or lend. This period of ‘pre-open orders’ is not tradable yet. When the new orderbook begins, orders from borrowers and lenders are matched only if prices overlap.
The Itayose Rules — Preparing for a New Orderbook
Before the Itayose process begins, several steps are followed:
- Seven days before the launch of new tenor periods, the new tenor periods become available on the platform, and users can start placing their pre-open orders.
- Only limit orders can be placed during this period.
- One hour before the launch, the orderbook is locked, and users can no longer place, amend, or cancel orders for that period.
The Itayose Process — A Unique Approach to Market Opening
Once the orderbook is locked, the smart contract for the Itayose process is activated. This process involves several steps:
- All overlapping bids and offers are consolidated. If there are no overlapping orders, no matching occurs, and the market opens without an opening price.
- The opening price is then calculated based on:
a) the sum of the lend amount,
b) the sum of the borrow amount,
c) the execution amount of the opening price,
d) the imbalance between the buys and sells. If there is no imbalance, the mid-price is taken,
e) the highest execution volume. If there are similar values,
f) the lowest imbalance. If there are similar values,
What Happens After the Itayose Process?
Once the Itayose process concludes, the orderbook starts trading normally. Any orders not filled during the Itayose process remain in the orderbook. Orders that were executed during the Itayose process are filled at the ‘opening price’.
To encourage users to place opening orders closer to the market level, thereby ensuring efficient execution and enabling fair price discovery, Secured Finance waives transaction fees during the Itayose process.
Conclusion: The Itayose Method as a Key Innovator in DeFi
Secured Finance’s implementation of the Itayose method provides a transparent and orderly process for the opening of new markets, allowing users to make strategic decisions based on market dynamics.
This advanced feature marks another step in Secured Finance’s continuous effort to revolutionize the DeFi landscape. By adopting such practices from traditional finance and integrating them into a decentralized environment, Secured Finance is setting new standards for the industry.
As we continue to witness the evolution of DeFi, platforms like Secured Finance are at the forefront, pioneering innovative ideas and solutions that redefine the financial system. In our next article, we will explore other unique features of Secured Finance that continue to revolutionize the DeFi landscape. Stay tuned for more insights and continue investing smartly with Secured Finance.
