DutchX

Basics

• From the Token Economy newsletter (7-2019):

"The DutchX uses the dutch auction principle for trading tokens. Even though this model is less well known than the others the mechanism is actually not that complicated: the seller begins the auction with a high asking price for a set quantity of a token and then the price goes down over time. At each point in time bidders can buy a desired amount of tokens at the current price. When bidders have bought the full amount of tokens for sale in the auction every buyer pays the lowest (/last) price. The DutchX mechanism removes some challenges like no front-running and slippage due to low liquidity. The main issue with this model is that it is slow: each auction takes about 6 hours to clear."

Usage

• From the Token Economy newsletter (7-2019):

"The DutchX launched in February and is currently seeing weekly volumes around $400k. There’s a big peak in late June caused by the fact that trading on the DutchX gave you governing rights in the dxDAO until the 28th of June. When volumes are modest and single events have large effects like this it’s obvious that their product has a less established regular user base. A key promise of the DutchX is low slippage and the data does support this claim, which is encouraging. You can inspect the DutchX’s relatively low slippage across different token pairs here.

It seems fair to attribute some of these differences in volume to the complexity of using each product. Uniswap and Kyber have a “press play” experience or under the hood integration with a nice dApp or wallet UI. On the other hand, most 0x interfaces require a user to have some understanding of trading and order matching while the DutchX requires users to both understand the dutch auction model and be present to bid at the right time. Now that does not necessarily mean that one approach is unequivocally better than the others: while all products allow for on-chain exchange of tokens they might be tackling different market segments."

• From this Twitter thread (1-1-2020):

"We launched dxDAOs with over 400 unique addresses participating and gave it control over DutchX.

The dxDAO has a small but active community now and I expect some exciting proposals for dxDAO early 2020. The DutchX protocol itself failed expectations and is not much used yet."

Team

• Has been built by Gnosis
• Is part of the DAOstack ecosystem (still as of 20-1-2020) as is Gnosis.