The DutchX: A Price Finding Tool with More Resistance to Swings in Trading Volume?

Gnosis has already funded 4 of 10 planned DAI-ETH auctions on the DutchX trading protocol with 100,000 DAI. The results showcase the ability of the DutchX protocol to act as a price discovery mechanism and an on-chain price oracle.

The DutchX stands above the rest of the field in this regard because its exchange mechanism makes it relatively resistant to major swings in trading volume. In most exchanges, an order of $100,000 would cause a big change in the price. But this has not been the case on the DutchX. Here’s the data from the last 4 DAI-ETH auctions, for which an order valued at $100,000 was placed in DAI:

Auctions Clear Price Reported Market Price (from CoinMarketCap) Difference
1 0.00701 0.00739 -5.1%
2 0.00695 0.00721 -3.6%
3 0.00741 0.00744 -0.3%
4 0.00736 0.00752 -2.1%

The DutchX API also offers a median price of several auctions, which can further reduce volatility and sharpen price finding accuracy. The best part of this price oracle, is that it's fully onchain, which means that it can be used as part of any smart contract’s logic (e.g. to resolve prediction markets or create token lending contracts).

The easiest way to get this price information is through the DutchX API, which has recently been improved and is now interactive.

Follow the hashtag #DutchXDAI or @GnosisPM for updates about upcoming auctions!

Submitted March 28, 2019 at 08:16AM }
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