Today, on April 1st, we’re unveiling the next generation of exchanges that we believe is so grand, you may as well call it the grand exchange. Botters Players have always wanted a way to hedge or speculate the value of their in-game assets for a long time. Usually, however, this means you have to use services against TOS, scam-filled forums, or extreme price market ups/downs.
That’s why we’re fully pivoting to making The UniDex GE², a fully on-chain, fully semi-backed*, and transparent way to trade assets listed on the GE.
How does it work?
There are 3 main components to the protocol.
1. Poolers
Poolers deposit OSRSg into a market-making pool that hedges against traders positions on the platform. You obtain OSRSg by locking 1 OSRS bond into an account labeled “Alameda Research” which is then a proxy for multiple other accounts acting as a multi sig by holding an equal amount of the deposit value in their accounts. Upon confirmation, keepers will mint an equal value of OSRSg on chain to your web3 wallet address which you can then use for trading or pooling on the platform.
This is very similar to the custodial process other wrapped non-native assets like WBTC and wDOGE have.
2. Traders
Traders obtain OSRSg through the minting process explained above, or through the open market just like other stable coins. They can use the OSRSg collateral to open and close positions and their winnings and losses go or take from the market-making pool. Since these positions are entirely synthetic, no opposite side of the trade is needed to fill orders, and they are executed against the oracle price. This allows traders to enter and exit trades without high activity.
3. Oracles
Trades are priced against the DON, which pulls from popular in-game API feeds. We obtain the current best bid and ask off the GE, price it against the USD price relative to 1 OSRS bond, and assign a USD value. Other counterparty measures are also in place to ensure a healthy protocol such as apply a price impact based on the deviation from the 14D-TWAP to the current best price
For example, if the current price for Snapdragon seeds sits at 34,000 GP but the TWAP sites at 38,000 GP. The trader will experience a much higher price impact on top of the existing spread due to a high deviation from the current market price.
Similarly, The price impact for closing works the same way to prevent market manipulation. If a trader enters at 34,000 GP, sells a lot of Snapdragon seeds pushing the oracle price down, the execution price will result in a loss until the TWAP comes down.
Security is a big concern. We will address this in a later update.
What can you trade
Anything is fair game which is what makes the protocol so innovative. The dynamic nature of in game market places transcending the game its played on has been something many exploiters players have wished for ages. Not many games have a thriving economy like Runescape, WoW, or EVE but these marketplaces have been battle tested for decades.
Let’s show some more examples of in-game markets to highlight the depth of tradable pairs.
We’re looking at the Food Index in Old School RuneScape here. This index trades the market price of 10 different common items
These 10 items can be bundled together, assigned a price by the oracle, and traded against the market-making pool within seconds. All that needs to be fetched is a collection of trackable in game data, current in game liquidity depth, and past market data. With this small handful of data, traders can place synths on their ingame items that were not previously tradable.
What about trading the value of GP?
By fetching the data of what in-game bond trades at, we can derive the value of 1 GP by the RWA cost that it takes to buy a bond.
We use this equation
To derive the proper USD cost with the data mentioned above. This is also how we apply a USD price to other in game assets!
Wen?
2 weeks
Disclaimer
Yes, this is an April fool’s joke, but the protocol can fully carry out the functionality described above. In fact, we already do this in other ways such as assessing volatility risk and orderbook depth from a more liquid orderbook and applying a price impact on trade execution (on top of other variables such as long/short ratios, hedge risk, etc).
If you like what we’re doing, I suggest you drop by our discord and let us know if you liked the read!
Important links
Discord invite link — https://discord.gg/unidex
Twitter — https://twitter.com/UniDexFinance
Telegram Group — https://t.me/unidexfinance
Telegram Announcement channel — https://t.me/unidexapp
Website -https://www.unidex.exchange/
Aggregation Terminal — https://app.unidex.exchange/
Leverage Terminal — https://leverage.unidex.exchange/
Leverage Leaderboards — https://www.comp.unidex.exchange/
Business Inquiries — marketing@unidex.finance