Skip to content
Branch: master
Find file Copy path
Find file Copy path
Fetching contributors…
Cannot retrieve contributors at this time
43 lines (37 sloc) 4.59 KB

Integration of DGX into centralized exchanges


There are two non-typical behaviours of DGX tokens that a Centralized Exchange will have to deal with:

  1. Transfer fees: 0.13% of DGXs is deducted when DGX tokens are transferred from one address to another
  2. Demurrage fees (which is only turned on DEMURRAGE_START_DATE): DGX balance of the exchange wallet will decay over time at the rate of 0.00165% a day (hence, ~0.6% a year).

More details about the DGX fees can be found at this doc

Contract for reading DGX fees configurations

Bare minimum DGX integration from now to DEMURRAGE_START_DATE:

Since there is no demurrage fees until DEMURRAGE_START_DATE, centralized exchanges only need to deal with transfer fees:

  • Assume that the user deposits into a personalized wallet, before the DGXs is swept to the exchange's wallet, there will be two DGX transfers which will take ~0.26%.
  • For example, if a user deposits 100DGX, only 99.87DGX will go into their deposit address, out of which only 99.74DGX will go into the exchange's wallet.
  • Suggestion: the exchange might want to tell the users that there is an addtional 0.26% fees when depositing DGXs and a 0.13% fees when withdrawing DGXs.
  • Suggestion: the exchange should include a note to roughly explain this extra fees, and link it to a post from Digix that explains the fees.

Extra integration needed after DEMURRAGE_START_DATE when demurrage is turned on:

  • Since the DGX balance of the exchange wallet will decay 0.00165% a day, the exchange should deduct the users' DGX balances by 0.00165% a day as well, in order to remain solvent
  • Suggested implementation:
    • The exchange should have an additional variable lastDGXDemurrageDeduction for every user, which could be initialized when the user deposits the first DGXs
    • Whenever there is a scenario that needs an updated DGX balance of the user, a function should be called to:
      • Calculate how many days have passed since lastDGXDemurrageDeduction
      • Deduct the demurrage fees from the user's DGX balance. There are multiple options an exchange could use to calculate this demurrage fees:
        • Use the DgxDemurrageCalculator contract (at link) to calculate the demurrage using the current demurrage rate on the blockchain. The documentation for this contract can be found here
        • Use a REST API provided by Digix that will take a numberOfDays and initialBalance and return the demurrage fees.
        • Since the demurrage rate is not likely going to change very often, the exchange could just use the rate of 0.00165% a day to calculate the demurrage. Digix will inform the exchange when this rate is about to change.
      • Update the lastDGXDemurrageDeduction
      • The exchange is encouraged to replicate the same demurrage deduction logic that is already described in here
    • The scenarios where a user's DGX balance should be updated might include:
      • When the user logs in (either throug UI or API)
      • Right before the user makes a DGX order
      • Right before the user's balance is updated after their DGX order is filled.
    • The exchange should have a note near the user's DGX balance that briefly say that DGX balance decays overtime, and link it to a Digix post that explains it.
  • Since the user's DGX balance will decay over time, a sell order of the whole DGX balance would become "insolvent" on the next day. Our suggestion to solve this problem is:
    • When placing new DGX sell orders, disallow the user to use more than 99.7% of their DGX balance in open orders. This ensures that the DGXs remaining are enough to pay for demurrage for 6 months.
    • To prevent a case where a sell order of 99.7% of the user's DGX balance remains open for more than 6 months and hence become "insolvent" (since the user balance is less than the amount on the order), a periodic script should be run at least monthly to:
      • Loop through all the users that have DGXs
      • For each user, if the DGXs in the user wallet (and are not on any open orders) are not enough to pay for at least 1 month of demurrage, cancel the open DGX orders.
    • The exchange should inform the users of these behaviors and link it to a Digix post that explains these behaviours.
You can’t perform that action at this time.