Hey All,
I'd like to begin by stating that I am still holding onto my #RUNE investments, and I plan to do so until I reach my goal of having over 10K+ #HBD in savings. To get to this point, I initially purchased more than 4,000 $RUNE tokens using over 0.15 $BTC. My $BTC came from exiting the MAYA - BTC liquidity pool, where I made a profit of over $1,000. I kept that $BTC in my wallet for a while, but eventually, I made the decision to go all-in on #RUNE and hold onto it until it reaches a value of $5 or more. So, for now, I'm holding onto my #RUNE investments, and I have no plans to sell them. Lets now delve into what does it mean to say that Dynamic Max Anchor Slip has been activated on #ThorChain.
- What Is It?
- What Does It Do?
- What Happens Next?
In a very simple term, Dynamic Max Anchor Slip is a way to make sure your cryptocurrency trades happen at prices that are reasonable and safe, and it adjusts the rules depending on how wild or calm the market is. Lets try to understand the same with the help of an example that will make things more clearly and simple to understand. Just imagine you're trading one cryptocurrency for another i.e. you are trying to swap one crypto coin for another. The Dynamic Max Anchor Slip sets a limit on how much the price of the cryptocurrency you're buying can change. If the price moves too much, your trade might not be safe or fair, so it won't go through and is good for the users overall.
From the above image you can clearly see that using the same starting params, ETH is ~60% healthy, BTC is ~80% healthy and the rest sit 90-95%.
Lets get back to our example::
Imagine you want to trade CryptoA for CryptoB on a decentralized exchange (DeFi platform) and lets say it is on @ThorChain. The current price of CryptoA is $100, and you want to buy CryptoB with it. And further you can set a Dynamic Max Anchor Slip of 5%.
- Initial Trade with Dynamic Max Anchor Slip of 5%: Your trade goes through because the price of CryptoB is within 5% of the expected price ($100 - 5% = $95 to $105). Hence you successfully get CryptoB for $100.
Now, let's see what happens when market conditions are changes to a
- Volatile Market: Due to high volatility, the price of CryptoA suddenly jumps to $120 from $100
With the Dynamic Max Anchor Slip of 5%, your trade won't go through because the price of CryptoB is expected to be between $114 and $126 (5% above and below the new price of CryptoA). Please note in this situation the trade didn't go through as the price of crypto assets that was being swapped increased in value almost 20% here in our example.
- Calmer Market: The market stabilizes, and CryptoA returns to $100.
The trade can proceed once again because the price of CryptoB now needs to be between $95 and $105 (5% above and below the current price of CryptoA).
The Dynamic Max Anchor Slip adjusts the allowed price difference for your trade based on the current market conditions. In a volatile market, it tightens the range and protects its users from making trades at extreme prices. And where as when the market condition are calmer or favorable, it allows for a wider range, making it easier for users to trade without restrictions. Finally this mechanism ensures that crypto assets trades will happen at fair and reasonable prices while accounting for the ever-changing nature of cryptocurrency markets. Creating a WIN-WIN situation for the users planning to trade/swap their crypto assets...cheers
Have Your Say on Thorchain - $RUNE - DEX & Dynamic Max Anchor Slip..
Dis you know about - Dynamic Max Anchor Slip? Are you invested in $RUNE? Did you hear about this news on THORFi Lending? Can $RUNE hit $5+ mark from here? Are platforms like @Lends_so, @BrokkrFinance, @THORSwap fully DEX? Can we consider funds on these platforms SAFE? Are they PURE DEX as claimed? Would love to hear your thoughts around it in the comment box below? Cheers
$RUNE with THORFi Lending - $RUNE is making BIG MOVES...
#dex #thorswap #dynamic #anchor #rune #thorchain #decentralization #deflationary #lending
Image Credits:: twitter, thorchain, pro canva
Best Regards