new Maiar DEX listing process | Maiar Exchange Price Discovery

By d3mentOr | Things You Need To Know | 20 Apr 2022


After the $RIDE ( Holoride) listing on Maiar Exchange, Elrond proposed some improvement points for future token listings.
The team started working on a new listing process.
One that is bot-free and aims to capitalize on the hype surrounding the new coin in order to mitigate its high initial volatility.

 

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The new listing mechanism can be broken down into three different stages:

  • Price Discovery
  • Adding Liquidity
  • Trading Start


1. Price Discovery

 

In the Price Discovery stage, everyone will be able to deposit either $EGLD or the new token into a Smart Contract.
We will deposit $EGLD if we want to purchase the new token.
We will deposit the new token if we want to sell it for $EGLD at the end of this stage.
At the end of the Price Discovery stage, the price between the two tokens will be decided by the ratio between the two tokens deposited in the Smart Contract.
Those who deposited $EGLD will receive locked new tokens, and those who deposited new tokens will receive locked EGLD tokens.
The swap will be after the depositing period ends, and it will be the same for everyone ( everyone will swap at the same price).
The locking mechanism is applied to reduce the incentives for speculators and create a much stronger priority for long-term contributors.
To avoid further volatility after the price discovery period finishes and trading begins, these locked tokens can't be traded for three days.
However, the locked tokens can be used to add liquidity.

 
Price Discovery will unfold in 4 Phases:

 

Phase 1
In Phase 1, people who wish to purchase the new token will deposit their $EGLD in the Price Discovery Smart Contract.
People who wish to purchase $EGLD with their new tokens will deposit those new tokens in the Price Discovery Smart Contract.
So, the ratio of $EGLD-new token will keep updating in real-time, in order for the price to be discovered.
There's no swap in this phase.
If people change their minds, they can easily withdraw their tokens without any penalty.

Phase 2
In Phase 2, deposits are still possible, just like in Phase 1, but withdrawals will carry a penalty that will gradually increase over time from 0% to 5%.
This is to discourage price manipulation attempts by people who deposit big amounts of tokens in order to drive the price up or down, only to withdraw at the last minute.

 

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Phase 3
In Phase 3, deposits are no longer possible.
Withdrawals will carry a fixed penalty of 10%.
Penalties will go directly into the Price Discovery Smart Contract, contributing to the final ratio.

Phase 4
In Phase 4, the Price Discovery stage ends.
Withdrawing the initial deposits will no longer be possible.
Participants in Price Discovery can now redeem their purchases as locked tokens.
These locked tokens can't be traded for 3 days.
But they can still be used to add liquidity.


2. Adding Liquidity

 

In this next stage, adding liquidity starts.
Owners of locked tokens, as well as owners of regular tokens, can deposit liquidity at the ratio established in the Price Discovery stage.
Providing liquidity after the Price Discovery stage, and the locking mechanism should greatly reduce volatility between $EGLD and the new tokens.
Therefore, it should greatly reduce Impermanent Loss for initial liquidity providers.
Liquidity providers will be able to earn a very significant reward of around 1000% APR in the first week.

 

3. Trading Start

 

Trading can finally start now that Price Discovery has ended and liquidity has been provisioned to the exchange.
It is also important to mention that during the initial trading phase, traders will receive tokens that are locked for ~3 days.
This is done to encourage long-term supporters to interact with the token while discouraging speculation.

 

 

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d3mentOr
d3mentOr

He who hesitates is lost.


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