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cDEX
Pre-Babylon centralised automated market maker.
The Ociswap cDEX is a temporary and centralised solution to facilitate a simple, fast and safe swapping environment until smart contracts can be deployed on the Radix Network. Other than basic swap-functionality, Ociswap also offers its users the ability to deposit liquidity into the pools and earn a large share of the cDEX fees.
Until Babylon, the liquidity pools are centralised and thus in custody of Ociswap. If you encounter issues, please contact us at [email protected]
Swaps
Liquidity Pools
Fee Structure
Under the hood of the Ociswap cDEX is a centralised automated market maker mechanism. This mechanism provides instant feedback on rates and slippage. It also supports swaps that involve separate liquidity pools, which means that you can directly swap your token into any of the other listed tokens.
The Ociswap cDEX can handle a large number of swaps per second. This is achieved by batching the out-going transactions.
With every swap, a 0,5% swap fee is charged. This fee is the same for every end user, making our platform the most affordable option on the Radix network for the majority of the Radix community. To learn more about our cDEX fees, see the "Fee Structure" tab.
Pools
Each of the cDEX's trading pairs is underpinned by a liquidity pool. This liquidity pool holds balances of two unique tokens (i.e. XRD/OCI). The major benefit of liquidity pools is that these pairs can act as automated market makers to maintain a so-called "constant product" formula.
This formula requires that the total amount of liquidity (
k) remains constant and is most simply expressed as x * y = k , where x and y represent the pair's reserve balances. An important property of this formula is that large trades (relative to the reserves) are discouraged through a notable price impact.
Providing Liquidity
Ociswap incentivises users to add liquidity to the cDEX pools by rewarding providers with the generated trading fees (for more info see 'Fee Structure'). Anyone can become a liquidity provider, which is done by depositing a proportional value of each underlying token into the pool. At the same time, unique LP-tokens will be minted and sent to the provider. The amount of tokens one receives, is proportional to the total reserve. These LP-tokens represent the contribution that was made to the pool and can be redeemed for the underlying assets and accrued fees at any time.
Liquidity providers may be exposed to impermanent loss during large and sustained movement in the underlying asset price. For your own calculation it should be around 25% IL in the event of a 5x price change.
In practice, the Ociswap cDEX applies a 0.5% fee to swaps. This fee can be subdivided into two parts:
- Liquidity Provider Fee (80%)
These fees are pro-rata awarded to liquidity providers but are initially deposited into the liquidity reserves to increase the pool-value. Liquidity providers can realize their share of the fees and withdraw their portion of the underlying reserves by burning their LP-tokens (on our cDEX these tokens are taken out of circulation by sending them to our pool wallet).
- Protocol Fee (20%)
This fee is used to gradually increase the size of the liquidity reserves and improve price stability.
Last modified 4mo ago