We’re at the moment operating a 3 day trial of the dFusion protocol designed by Gnosis as a possible alternative for the Arb Pool mechanism that was halted earlier this 12 months. The intent of this mechanism is to promote SNX for ETH, to be for peg upkeep through the sETH:ETH pool in Uniswap.
Whereas the earlier Arb pool was considerably efficient, it was liable to manipulation. Another was proposed to public sale SNX for ETH to then purchase sETH on market. A number of trials had been run of this course of, and it was moderately efficient with a number of hundred ETH value of sETH on the open market from the proceeds of SNX gross sales. The difficulty with these trials is that they had been handbook, and the timing of every public sale was not very best for engagement.
The present trial is a big enchancment on this because it makes use of the dFusion protocol to run a small public sale of SNX each two hours for 3 days, which ensures that timing points don’t affect demand. The ETH proceeds are then used to purchase sETH utilizing dFusion. It stays to be seen whether or not this be as impactful as shopping for sETH straight from Uniswap utilizing ETH, however we will probably be carefully monitoring the efficiency of arb bots through the public sale to look at this.
The opposite challenge is that dFusion solely helps ERC-20 tokens so we’d like a technique to public sale escrowed SNX. The answer to that is eSNX, which is a type of SNX that may be despatched to a contract and burned to create escrowed SNX. As soon as we’ve got eSNX applied we can migrate from a trial to an ongoing incentive. Extra data on the eSNX mechanism may be discovered right here.
By combining eSNX with dFusion, the protocol will have the ability to run a steady public sale of escrowed SNX to generate ETH to purchase sETH on market by means of dFusion. This mechanism ought to ideally create adequate shopping for strain to revive the peg to 1:1.
If you need to take part within the trial please take a look at the #snx-auction channel in Discord.
Study extra about dFusion
With the dFusion protocol Gnosis introduces a brand new decentralised buying and selling mechanism for ERC20 tokens. The dFusion protocol makes use of batch auctions and a multidimensional order ebook to be able to allow ring trades that share liquidity throughout all belongings. There’s at the moment a bug bounty program dwell on the dFusion protocol, and there will probably be a public launch of the protocol in H1 2020. You possibly can earn as much as $50Ok for each bug you report. Particulars of the bug bounty are right here: https://blog.gnosis.pm/2020-dex-bug-bounty-210f2b67a764