Decentralized Finance or DeFi in short is no doubt is the progressive future of Finance as well as the Cryptocurrency.  As of now many of us lurking around this crypto space may have realized the potential of DeFi and major breakthroughs in it.

In this fast growing and complex environment of DeFi space a project should stand out itself from the rest to achieve new milestones and add to value to the community as a whole.

Dextoken Protocol is all set to achieve great new milestones along the way solving problems like over-speculation trading behavior in the cryptocurrency market, which causes excessive price fluctuations which is prone to investor losses.  Dextoken Protocol aims to solve excessive price fluctuations caused by over-speculation by implementing the brand-new ‘Speculative AMM’.

DeFi itself is a complex thing and Dextoken Protocol involves whole new level of complexity in its DeFi infrastructure. Thanks to that complexity in the project we get to experience DeFi much deeper level.

In this article I would like to provide overview of Dextoken Protocol.

DEXTOKEN PROTOCOL

• In the case of normal trading environment speculative (futures) and arbitrage (cross chain/platform) trading are considered to be part of the free market. But in actuality these lead to over-speculation resulting in excessive price fluctuations mainly caused by the whales, Centralized Exchanges and speculators who hold the majority of pricing power.
• To mitigate the excessive price fluctuations and to avoid investor losses due to abrupt and unanticipated changes in market prices caused by the over-speculation Dextoken protocol uses Speculative AMM to ensure token pool liquidity and benefit DEXG token holders by rewarding them a portion of the transaction fee.
• The purpose of the Dextoken protocol is to enable the blockchain network to calculate the theoretical token price.

SPECULATIVE AMM

• In the case of CeFi whether it is crypto or otherwise the whales, Centralized Exchanges and speculators who hold the majority of pricing power are in the position of price fixation. This often results in excessive price fluctuations.
• Dextoken Protocol incorporates Speculative AMM as a method of price valuation model that is based on a robust economic and quantitative trading framework.
• The price valuation model enables the blockchain network to determine the theoretical price (reasonable price). Meaning truly decentralizing the pricing power.
• The Speculative AMM establishes price valuation models based on the properties of a blockchain network: Users, transaction needs, platform utilization rate, interest rate, and other characteristics.

This figure illustrates how the Speculative AMM as a method of price valuation model helps truly decentralize the pricing power to the community.

OFFCHAIN MINTING

• The DEXToken protocol can mint a number of off-chain tokens, and an on-chain smart contract can be used to regulate the circulating supply of off-chain tokens. Minting of off-chain tokens also takes place on a different smart contract.
• It can also provide a scientific minting mode for both off-chain and deflationary tokens.
• It is the utility token for the Dextoken Protocol. It can also be offered to a market for attention, acquisition, or consumption. This off-chain issuable token technology is required to provide minted token redemption and user withdrawal capabilities.
• The DEXG token model implements a low volatility AMM model that ensures a low exchange rate volatility in crypto trading pairs.

CONCLUSION

• DeFi space is booming and there is no doubt in that but for the mass adoption and to welcome new comers it is crucial to mitigate excessive price fluctuations and over-speculation so that investor losses will be eliminated incured due to abrupt and unanticipated changes in market prices.
• Dextoken Protocol looks like best solution to mitigate these issues, with its Speculative AMM and Offchain Minting in place we can see real prices of a token which is not dictated whales, Centralized Exchanges and speculators who hold the majority of pricing power.