Decentralized stochastic order book
We have designed our exchange platform with the intention of solving a number of key problems and common annoyances that affect the quality of trading experience from the current crypto exchange platforms.
Centralization of the order book allows the Exchange in charge of matching buy and sell orders to distort volume and manipulate price of cryptoassets, especially the less liquid pairs. By creating artificial trade volumes, targeted cryptoassets look more appealing to traders and catch their attention, which leads to overvaluing. It works like a trap by big market players who play with the value of the asset itself.
Acting as escrow for their clients, centralized exchanged can freeze any transfer or withdraw the customer’s funds.
Trading costs and processes remain opaque and involve high trading costs, often higher than announced fees and higher delays due to peaks of demand poorly managed. Furthermore, front-run orders can happen and kinda spoil your life.
Traders don’t join decentralized exchanges because few other traders are on the marketplace to be the counterpart for their trade, which leads to low transaction volume and the classic chicken and egg problem.
A direct effect of low trade volumes is that they contribute to limit the variety of cryptoassets available and to the lack of quality of traded cryptoassets.
Tozex platform will combine the best of both model properties through a cryptoasset platform with an integrated decentralized order book.
Liquidity mechanism
Tozex aims to improve cryptoassets liquidity because it encourages widespread adoption of cryptoassets from the belief that the market deserves a safer and more efficient exchange to facilitate trade between consumers within the network.
Now many crypto traders have to place their faith and trust in centralized exchange.
Liquidity is a major problem when your cryptoasset enters on the secondary market, because of insufficient number of market makers. In that fact, the bid-ask spread becomes more important, as selling prices become too high and the asking prices too low. When this happens, the cryptoasset affected becomes illiquid. Tozex Reserve provides a new decentralized liquidity mechanism by involving the project owner and market makers at different stages of the cryptoasset lifecycle.
Indeed, after the successful completion of the crowdfunding phase the project owner (often called the team behind the project) stays with a solid amount of native tokens — around 7 to 15% of the total supply. A portion of this amount could be used to provide more market liquidity instead of being stored for years.
We believe that the role of the project owner is to contribute to making the market liquid as much as possible for the benefit of the project ecosystem.
Tozex Reserve has several advantages with the combination of a decentralized stochastic order book. The Tozex Reserve will be managed with smart contract capabilities; automated trigger point rules with a distributed governance mechanism to avoid any manipulation.
Instead of managing all bids and asks in a centralized way, the decentralized stochastic order book allows all stakeholders to audit our trustworthy marketplace instantaneously.
Tozex Reserve is a set of Multisignature smart contract deployed for each cryptoasset listed on the platform.
Each project owner has the possibility to enable this option by providing an amount of his cryptoasset to the Tozex Reserve. Once the reserve is created, the project owner will provide his public key to take part in the reserve governance.
The fund will be stored on one of two Multisignature contracts allowing to refuel the market in case of liquidity needs; one key will be owned by the platform and the second one by the project owner himself. The Tozex Reserve Multisignature “TRM” contract allows to send the reserve back to the owner in case of non-agreement about the liquidity set up conditions using the fund reserve. When the liquidity conditions are met, the fund will be stored in a cold storage and the decentralized stochastic order book will take it into account when trading conditions are met (time, liquidity and deeper market parameters).
The TRM contract will be initially funded by the project owner with an amount representing 5% of the total supply in circulation. In the future, the liquidity service will be also available for market makers who have a key role in the cryptoasset liquidity sustainability.
The decentralized stochastic order book “DsOB” has a crucial role to manage an average price and execute bids & asks orders, which can be identified by all traders on the market.
Discover it all at https://tozex.io
