Transparent and Equitable Auctions

Transparent and Equitable Auctions: Ensuring Fair Order Execution

Transparent and Equitable Auctions stand as a pioneering feature within Multipool, introducing a visible and unbiased order execution process. These auctions occur every 8 hours, providing participants with a transparent order book. The execution of orders is based on the current price fetched from the linked DEX liquidity pool at the time of execution. However, a time-weighted average is employed to calculate the distribution of tokens to each participant. This approach ensures fairness by granting participants higher token yields if they contribute earlier to the auction.

How It Works:

  1. Auction Pool Creation: A fresh auction pool is created at the commencement of each auction cycle. This pool contains two tokens linked to a specific DEX liquidity pool, such as ETH/USDT. Users have the liberty to contribute either of the two tokens to this pool during the 8-hour auction period.

  2. 8-Hour Auction Cycle: Participants are allowed to add tokens to the auction pool over the course of the 8-hour period. As more users contribute to the pool, its liquidity grows, paving the way for a balanced and dynamic auction.

  3. Time-Weighted Average: The time-weighted average comes into play when calculating how many tokens each participant will receive at the auction's execution. The earlier a user contributes tokens to the pool, the greater their share of the auction's value will be when it is executed.

  4. Order Execution: At the conclusion of the 8-hour cycle, the auction is executed at the prevailing price fetched from the linked DEX liquidity pool at that moment. The tokens are then distributed to the participants based on their contributions and the time-weighted average calculation.

Advantages of Transparent and Equitable Auctions:

1. Transparency and Clarity: Transparent and Equitable Auctions provide an open view of the order book, instilling trust and confidence in the trading process. Traders can observe the auction's progression and easily verify the execution price fetched from the liquidity pool.

2. Fair Distribution: Utilizing the time-weighted average calculation ensures fair distribution of tokens to participants. Early contributors are incentivized as they stand to receive a higher proportion of the auction's value, encouraging active participation from the outset.

3. Inclusive Participation: By employing a time-weighted average, Multipool ensures an inclusive environment for traders of all sizes. The distribution mechanism provides opportunities for both early and late contributors, offering a level playing field for all participants.

Transparent and Equitable Auctions exemplify Multipool's commitment to fairness and inclusivity in the DeFi trading realm. With a clear order execution process and calculated distribution based on time-weighted average, Multipool empowers traders to engage with transparency and confidence, knowing their contributions are valued equitably. As we delve deeper into Multipool's features in the forthcoming sections, we unveil a world of possibilities that redefine the DeFi trading experience for users of all backgrounds.

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