It has been interesting to watch the DEXG token chart the choppy waters of decentralised finance. The DEXToken Protocol is unique in that its Speculative Automated Market Maker is a self-regulating algorithm that seeks to avoid excessive speculation and dangerous over-inflation of the DEXG currency.
Not the strategy this time
6,500 DEXG were distributed following an initial liquidity offering on UniSwap on August 24 this year. Such is the volatility of markets in the current DeFi ecosystem, DEXG could hardly have chosen a better time to test the stability of its 'reasonable price setting' mechanism.
The price-stabilising algorithm adjusts the supply of coins offered for circulation at each staking round. The number of coins issued is dependent upon factors such as the price, the volatility of price levels, stability of trade and the numbers of the user base. The DEXToken whitepaper makes for an interesting read:
"The advantage of the Speculative AMM model is that the larger the user base, the higher the price can be theoretically increased. At this time, to maintain price stability – that is, low volatility – liquidity is decreased."
That's not to say there aren't enticing opportunities for a quick trade turnaround. The spike in the price on 30 September correlates to the announcement of the forthcoming introduction of DEXG to the Balancer Pool.
The new Balancer liquidity bootstrap pool will be composed of 90% DEXG and 10% USDC. Round 2 (LUNA) of DEX Staking is happening any time now - really, like soon! You can check out DEXG official announcemnts on Telegram here.
Ultimately, as an investment, DEXG should appeal more to holders of long-term portfolios than customers looking for overnight gains. The DEXToken is a project of the Flowchain Foundation, an organisation based in Singapore looking to introduce blockchain solutions to the IoT. A year ago it established a Tokenomics Research Center in Taipei. There are numerous exciting development projects in the works including the production of a low cost IoT blockchain dev kit supporting distributed ledgers. IoT is an expansive field seeing rapid investment but also by nature a potentially sensitive one (IoT sensors; data chains) so it's encouraging to see that Flowchain has an open source philosophy going forward.
