The Gnosis project has launched a decentralized exchange, the Gnosis Protocol, which allows you to trade any cryptocurrency with a limited” slippage ” of the price.
The developers of Gnosis reported that during the closed beta testing, the volume of trading on the Gnosis Protocol was more than $2 million. In the future, the exchange will ensure minimal price “slippage” even with those digital assets that are characterized by low trading volumes.
After a trader places an order on the exchange in any trading pair and specifies the maximum price for its execution, the system groups these orders, and other users determine the effective way to execute them. The one who finds the most optimal solution receives 50% of the trading commissions that are pre-paid by traders.
Every auction with a “complete” applications lasts for five minutes. If the order was not executed, it goes to the next auction. This means that the trader will have to wait at least another five minutes to execute his order, and there is no guarantee that this will happen in the current round.
Gnosis Protocol explained that it does not aim to provide fast calculations. The exchange is aimed at large traders, and provides high competitiveness with other decentralized exchanges. Co-founder and CEO of Gnosis Martin Koppelman (Martin Köppelmann) said:
“This strategy will be interesting for those who trade large amounts, as we want to compete at the expense of price. If you make small transactions, even with minimal price slippage, five-minute delays will require additional effort and time, which simply does not make sense.”
In addition, the Gnosis Protocol will allow you to make “ring” transactions. Unlike a traditional transaction where one buyer is matched with one seller, a “ring” transaction can match multiple traders using more than two digital assets. At the same time, the liquidity of the trading pair does not matter – users will be able to find buyers interested in one or more assets of the trading pair and match their orders.
Keppelman said that the Gnosis Protocol mechanism can be integrated with DeFi protocols, especially those that use liquidation auctions. He added that the platform’s user interface is managed by dxDAO, which also manages the interface of another decentralized exchange, Gnosis – DutchX. However, Gnosis Protocol is a fully decentralized exchange, and its smart contracts cannot be updated.
Recall that the beta version of the Gnonis project was launched on the Ethereum network in August 2016.