SpicySwap Adds Limit Order Functionality Taking DEX Trading On Tezos To A New Level

by | Mar 20, 2022 | DeFi, Latest

SpicySwap has a new limit orders option that allows traders to set buy orders on predetermined price levels.

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SpicySwap Adds Limit Orders Option

Trading cryptocurrency on a decentralized exchange DEX usually means buying and selling at current prices. This means trading is limited to manual trades, which is one shortcoming compared to centralized exchanges that allow you to set buy and sell orders.

Traders use technical analysis to determine at what prices they set stop losses and buy orders. This way you don’t need to be online 24/7 to be able to make the right moves as a trader.

Now, SpicySwap has a new limit orders option as part of its SpicySwap Pro upgrades that allows traders to set buy orders on predetermined price levels. This is a big step in the Tezos DEX space.

If trading XTZ – uUSD, setting a buy order for XTZ at preset levels speaks for itself. Setting up a sell order is simply done by setting up a buy order for uUSD. 

SpicySwap, one of many DEXs on Tezos, recently announced that they had hit $1 million in lifetime volume.

The DEX has always been at the forefront of innovation in the Tezos DeFi space and is also developing CDP vault leveraging (flash loans) for the Spicy UI to be added to its SpicySwap Pro new features.

WTZ

Remember that on Spyciswap, you won’t be trading XTZ, but the wrapped version of XTZ: WTZ. You don’t buy WTZ, but you obtain it on Crunchy Network by minting it.  

If you want to trade it back to XTZ, you simply burn the WTZ you have and get XTZ in return. 

WTZ is an XTZ wrapper provided by Crunchy Network.  The XTZ – WTZ wrapper contract is a decentralized way to wrap your XTZ and mint WTZ on a 1:1 ratio.

The mission for Wrapped Tez (WTZ) is to provide a straightforward solution for baking your Tezos while participating in DeFi. WTZ aims to be a low-code, self-custodial, no-fee token that just works. There are no extras, no bridges, and no partnerships.

The concept is pretty simple. People who mint WTZ, will deposit XTZ into the WTZ smart contract. That XTZ will be staked and earn staking rewards. Because of this, the XTZ pool increases.

That increase will then be returned to the WTZ holder that burns his or her WTZ for a more favorable exchange ratio.

The exchange ratio at point zero, is 1:1. After one year that is 1:1.06. So, that is 1 + 6%, since the yearly staking rewards are ~6%. This means that you’d have gotten 1 WTZ for 1XTZ at point zero, and get 1.06 XTZ back if you burn your WTZ a year later. 

This is a continuing process. So the exchange ratio continues to go up. In two years it will be 1:1.12. That rate goes for everyone.

So, if you mint WTZ a year after point zero, the exchange rate will be 1.06 XTZ for 1 WTZ. Burning WTZ a year later will give you 1.12 XTZ for 1 WTZ. The number will be slightly higher due to the compound interest factor. 

This way anyone can mint and burn WTZ at any time and get the same value for their WTZ, while the staking rewards are distributed correctly through this simple method. 

This also means that the value of WTZ will increase by ~6% every year. It will be interesting to see how the market will hold that value. It might fluctuate and grow more steadily while the market matures. It is something to be aware of though. 

There are no minting fees for minting WTZ. There is a 0.1% burn fee though. But if you hold a couple of cycles, you’ll have earned that back from the staking rewards.

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