How is DEUS Different from other projects trading synthetic Stocks?
Most exchanges including Binance, Serum, and Injective rely on an old fashioned order-book system to drive internal trading activity. Trades only happen when you match a buyer and seller to execute the trade, thus determining an asset’s price. To be clear the price is determined by buyers and sellers on these platforms it is not the actual price of said asset. Also if a pair has low trading volume on the exchange, it will suffer from poor liquidity and massive price spikes up and down due to slippage. You may not be able to have your full order filled if there is not enough being sold at the price you want to pay.
Thankfully, in contrast, Deus Swap uses real-time, live external price feed, oracles, that constantly update and give the genuine and exact price from the original asset the synth represents. Therefore, every synthetic asset on Deus represents an asset on a much larger exchange with ample liquidity and relatively stable price.
Orders large or small are always ready to buy and sell on Deus Swap as instead of the old fashioned order book system we use an Automated Market Maker (AMM) system. This is one of the key benefits to using Deus over Injective or other derivatives platforms. You’re able to buy as much as you want, whenever you want, without having to hope there is someone else ready to sell to you. Now, how is it possible that you can buy without there being a ‘token-holder’ willing to sell to you?
How does our AMM work?
Traders are buying from the Deus treasury, which mints the tokens on the spot. When they choose to sell, the Deus treasury buys back the tokens at the updated price, as determined by the primary market for the asset. This is how Deus can list thousands of assets without having billions of dollars spread across many liquidity pools.