March 24, 2022

Introducing: Dopex TZWAP

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Dopex is proud to announce TZWAP - the Time-Weighted Average Price feature.
TZWAP allows anyone to create an on-chain TWAP order split by intervals and ticksizes (order size) that can automatically be filled by bots for a fee.
TZWAP is available on Arbitrum.
ℹ️ The TZWAP works as follows:
  • The TZWAP can be accessed via https://app.dopex.io/tzwap
  • Users choose the tokens they want to swap
  • Users choose the batch size - i.e. how the order will be portioned and the time interval between the orders
  • The order will be routed through the trade aggregators (like 1inch)
  • Users can remove the order and issue a new one at any time
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Why use TZWAP?

Using Time-Weighted Average Price (TWAP) is an additional way to execute larger orders that can move the market very significantly and expose the users to a large slippage risk.
Whether the user is a DAO or a Treasury looking to convert some tokens, or a trader looking to enter or close a trade - executing large orders may leak a lot of information to the market and expose the users to big trading costs.
Instead, the users can TWAP. This way their order can be split into smaller chunks that's in line with regular volume. The portioned transaction is then easily filled against other market orders, without moving the price significantly.
Example use cases are:
  • Traders looking to slowly exit large positions
  • DAOs looking to gradually convert significant amount of tokens
  • Treasuries, protocols looking to convert tokens to stables over time to cover the budget expenses

Let’s talk more about an example use case - “The Trader”

Suppose a trader has spotted an opportunity and wants to accumulate a significant amount of tokens before the price goes up and others notice the opportunity too.
There is one problem - if the trader purchases a significant stack at once, they will inadvertently move the price up. And if they move the price up significantly, they will draw the attention to the trade, which stops them from accumulating the position further.
Instead, the trader creates an order using TZWAP. He sets up a small batch size and a large interval - this way, they steadily accumulate the tokens in silence, without drawing too much attention.

How about - “The Treasurer?”

A crypto project runs a treasury which they use to cover expenses (team, infrastructure etc). A significant portion of the treasury is in ETH and some alts, while keeping a portion of stablecoins to cover the near-term expenses.
The treasury needs to sell a large amount of ETH for the planned quarterly expenses. If they execute the transaction at once, they may pay thousands or even tens of thousands of dollars in execution costs (such as slippage). Instead, the treasury can create a TZWAP order and sell ETH gradually, throughout a few days or even weeks, to avoid losing money on slippage.
 
Et voilà - that's how TZWAP can be used. Have a try - and if you got any questions, feel free to hop onto our discord: Discord.gg/dopex.

About Dopex

Dopex is a decentralized options protocol that aims to maximize liquidity, minimize losses for option writers and maximize gains for option buyers — all in a passive manner.
Dopex uses option pools to allow anyone to earn a yield passively. Offering value to both option sellers and buyers by ensuring fair and optimized option prices across all strike prices and expiries. This is thanks to our own innovative and state-of-the-art option pricing model that replicates volatility smiles.

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