Combined Swap not only combines offers, it also aggregates liquidity from additional sources (for example AMMs) from within the Chia DeFi ecosystem, which allows for the exchange of any amount, not bound by existing offers. By aggregating liquidity, dexie can often provide a better price with a reduced price impact compared to relying on a single source of liquidity, especially for larger swaps.

This makes users essentially arbitrageurs, and they can even profit from price differences across different liquidity sources. And it all happens automatically!

Based on Chia Offers

One great thing about Chia offers is that they give users an atomic guarantee, meaning their offered asset is only transferred if they receive the requested asset in return. As a result, user funds can't be lost even in case of interaction with an unsafe liquidity source.

This makes offers a perfect tool for such a service, as there is no trust required in the swap path dexie chooses; the worst outcome is that the offer is not being completed. In such rare instances, the user can easily cancel the offer and try again.

Our first integration, besides dexies offers, is TibetSwap, the first AMM on Chia. We plan to add more liquidity sources as the Chia DeFi ecosystem grows. Combined swap initially supports XCH trading pairs, but we plan to add token-to-token (CAT-CAT) swaps too.

Fees and Liquidity Sources

Combined Swap includes, at the moment, a 1% fee on the XCH amount. Depending on which route is being used, the fee is distributed as follows :

• Combined Offers (1% dexie treasury fee)

• TibetSwap AMM (1% total fee comprised of: 0.7% TibetSwap LP fee, 0.15% TibetSwap Dev Donation, 0.15% dexie treasury fee)

With the launch of Combined Swap, we are phasing out DBX rewards on combined offers to focus on DBX liquidity incentives, more on that soon.

Let us know in Discord or Twitter/X if you have any comments, suggestions or issues, we are always happy to chat!

That’s it for today, thanks for reading and we’ll see you soon.

TVL represents the total value of assets locked in a DeFi protocol or smart contract. It has become a popular metric for gauging the success of various projects.

With Chia offers we don’t really have project TVLs. Offer liquidity can exist on multiple exchanges (aggregators) simultaneously. The whole Chia ecosystem has access to the same cumulative liquidity, all without any protocol fees. This enables real decentralized liquidity, that no one owns.

Market makers stay in full control of their funds at all times and are not bound to a specific protocol. They can provide the same liquidity to multiple offer aggregators at once or even for multiple pairs at the same time (eg. offering the same XCH coin for both DBX and SBX). They can leverage Chia's custody primitives, such as vaults, and have the option to withdraw their liquidity completely simply by using (spending) their coins, thereby invalidating all outstanding offers.

We expect that wallets will, by default, push created offers to most aggregators automatically, and aggregators will share those offers with each other, resulting in faster offer completion and a more efficient DeFi ecosystem. In addition, liquidity incentives, like those found on dexie, not only incentivize liquidity on dexie but also, in theory, incentivize the entire offer ecosystem.

The beauty of all of this is that it happens off-chain and can scale massively. Receiving and indexing offer files is essentially Web 1.0 technology, proven for decades. Along with expiring offers that don't require a cancellation transaction, it's possible to create reactive order books not bound by any blockchain limits. Only the offer settlement needs to happen on chain.

Offer aggregators such as dexie can thrive by providing the best interface, tools and APIs for managing offers, but they cannot depend on their liquidity, as any other aggregator can simply index the same offers. However, this also implies that dexie can benefit from the growth of other aggregators.

TVLs are a useful metric for collateralized protocols like Circuit DAO, or for AMMs like TibetSwap. One could try to measure a TVL across the whole Chia offer ecosystem but TVLs are not relevant to individual offer exchanges/aggregators which have shared liquidity based on Chia offers.

Offers really enable a new approach to DeFi liquidity and those unique advantages are precisely why we choose Chia for dexie. 🦆

If you want to stay up to date with all things dexie, check out our brand new @dexie.space account on bsky.app!

Mute Functionality

If you don't want to see an asset on dexie, you can mute it. This will exclude it from Trade, Recent Trades, Markets and the Asset selector.

Assets can be muted either from the Recent Trades page by selecting Mute from the dropdown next to the Inspect button, or by clicking the Mute button on the Assets page.

To unmute an asset, visit the Assets page and either search for the muted asset or select Muted Assets from the search filter dropdown.

The mute list is locally stored on your device. In the future, we plan to add the functionality to backup (export) and restore a mute list, which would even enable users to share common mute lists.

Enjoy your customized dexie browsing experience! 🦆

To find out if you still have any active legacy offers, navigate to Your Offers, filter by Active and look for Legacy labels.

It’s recommended to cancel and recreate any legacy offers. This ensures that users can still accept them with newer versions of the Chia Wallet.

To identify legacy offers via the API, check the mod_version. mod_version values 0 and 1 are outdated and no longer supported. The current offer file version is mod_version 2.

Thanks for checking! 🦆

To address this, we are launching the Liquidity Incentive Program today. This initiative rewards market makers with our DBX token for creating offers close to the market price for key trading pairs, ultimately increasing liquidity and tightening spreads. This improvement will make exchanging larger amounts more seamless, especially when using our auto-combine feature.

This way we are not only incentivizing liquidity but also ensure a fair distribution of our platform and governance token (DBX), leading to a decentralized ownership of dexie in the long term.

dexie calculates rewards by taking snapshots of the order book at an average interval of 5 minutes. Only active offers within the specified spread are eligible for rewards, regardless of whether an offer is later cancelled or completed.

You can query and claim rewards on the Your Added Offers page, via the Batch Claim Tool, or by directly posting to the API.

Rewards have been accumulating for offers since May 10th. If you have added offers recently, be sure to review them for claimable rewards! ✨

For information on incentivized pairs and their reward rates, visit the Liquidity Incentive Program page.

You can also view the Claimed Rewards History for statistics on all claimable rewards and a record of all claimed rewards with their corresponding offers.

Liquidity

Liquidity refers to the ease with which an asset can be bought or sold in the market without causing significant price fluctuations.

Liquidity is important because it reduces transaction costs, enhances price stability, and overall market efficiency. A highly liquid market allows for quick transactions at a fair price, and even reduces market manipulation risks.

More liquidity can be a positive feedback loop where it attracts more market makers who will provide even more liquidity.

Currently one of the biggest issues on dexie is low liquidity, so we came up with ideas to improve that.

Liquidity Rewards for Offers

The Liquidity Incentive Program aims to improve the liquidity on dexie by encouraging market makers to create offers on dexie within a specified spread of the current market price. Market makers who create qualifying offers will receive rewards in DBX tokens.

Rewards are based on the proximity of the offer price to the market price and the offered amount. Offers closer to the market price receive higher rewards. To ensure a fair reward distribution, snapshots of the order book are taken at random intervals, averaging 5 minutes apart. As long as an offer is active and within the specified spread and range, it will be included in the reward calculation.

Each incentivized asset pair is assigned a reward rate in DBX tokens, which is shared among all qualifying offers within the pair.

Rewards can be claimed either on the Your Added Offers page by clicking the Claim button or by using our auto-claim tool. The claim tool is an open source Python tool which runs locally and will automatically claim rewards for all your created offers.

The Liquidity Incentive Program not only encourages liquidity, it also allows for a fair distribution of our governance token and helps to decentralize dexie's ownership.

It is set to launch this month! And who knows, offers might already be earning rewards. 😉

auto dexie

But there's more! Providing liquidity with offers can be hard to execute efficiently. Market makers must continually monitor their offers and may even need to handle coin splitting. To simplify this process, we are preparing to launch auto dexie!

auto dexie is a tool for liquidity providers to run locally on their node or farmer. It creates offers based on a chosen liquidity or trading strategy and even takes care of splitting coins. It's very flexible, meaning market makers can easily adapt or code their own strategies — fully non-custodial.

Together with expiring offers, it will become an efficient tool to provide liquidity, and can be, for example, enhanced to follow a price oracle or other external events, which AMMs can not do.

It's fully based on Chia offers, which means, in theory, you could even provide liquidity to multiple offer DEXs at once!

This tool will be, of course, completely open source.

So, what’s up with AMMs?

We've seen some serious progress with AMMs (automated market makers) recently on Chia, which is exciting.

AMMs are effective in providing initial liquidity for new tokens with undeveloped prices or tokens not influenced by external factors. They are specifically useful in illiquid markets, as they will always provide someone to trade with.

AMMs also offer passive income opportunities for market makers and can be fully decentralized, in theory allowing interaction without a website.

There are however a few important downsides.

The way an AMM trades is locked into code. Everyone who provides liquidity to an AMM (LPs) trades exactly the same way. This is inefficient, because the only way LPs can make a profit, is by trading fees. Those fees however, are shared among all LPs evenly, resulting in mostly low returns.

Additionally, AMMs always trade uninformed which leads to value leakage due to external factors. Let’s say the Bitcoin price rises, due to external events. Active market makers on dexie will quickly adjust their positions (offers), which will make the price rise on dexie too. The AMM however, won’t know about this and will continue to sell Bitcoin for a discount until the balance of assets is restored. Arbitrage traders make use of this and constantly pull value out of AMMs.

To summarize: AMMs are good for exchanging smaller amounts, work well in mostly illiquid markets and are an option for passive market makers. However, in very liquid markets with deep order books or for assets which are mainly influenced by external events, AMMs may not perform well. Active market makers have more opportunities in order based DEXs like dexie, and takers benefit from a much lower slippage.

Recap

Liquidity rewards will enhance liquidity on dexie and enable the fair distribution of our governance tokens (DBX).

auto dexie will make it much easier to provide liquidity on dexie, fully based on offers and secure. Funds are never locked and are accessible at any time. Simply “using” the coins which provide liquidity on dexie, is enough to cancel all offers for it automatically.

We believe an order book DEX build on Chia offers is superior to AMM based DEXs, especially in terms of capital efficiency and security for both makers and takers. Less complexity is important when the stakes are high.

Thanks everyone, see you on dexie!