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ERC20 pooling contract for MGN

Disclaimer

Please note that due to the mechanism design of the DutchX MGN Pool, it is expected that when participating in the DutchX MGN Pool the remaining number of the deposited tokens, which may be reclaimed following the end of the trading period, will be significantly lower than the initially deposited number of tokens and may in fact be nil (0). It is therefore advised to only participate in the DutchX MGN Pool, if one wishes to accrue MGN and values such accrued MGN sufficiently high to justify the significant risk of losing all tokens initially deposited into the DutchX MGN Pool.

Status

The MGN pooling contract is no longer active
The remainer of this section is kept merely for information and open source re-use by interested parties.

Read the former Walkthrough

Purpose of the contract

The MGN pooling contract works on top of the DutchX trading protocol. The purpose is for anyone to be able to participate easily in trades on the DutchX in order to generate Magnolia. Users may participate in this pool with their funds, which they will reiceve back at the end of the trading period (or more precisely: the value of their deposit at the end of the pooling period, which may have increased or decreased). The user will also receive the share of their MGN that was generated using their funds.

Logic of the contract

  • The contract is set to run a certain amount of time (one for WETH-Token and one for Token-WETH)
  • The contract uses all funds to continuously take part (with all funds) in the sell side of the auction
  • The contract claims back the receiving token after an auction has finished and takes part in the sell side of the opposite auction
  • This process continues until the pre-defined time has been reached and an even number of auctions have been run
  • Magnolia is generated based on the rules of the DutchX (the pair has to be whitelisted)

Users' actions

As the purpose is easy participation for a user, only three actions have to be conducted:

  • The user may deposit funds (one defined ERC20 token) at any point in time before the pooling time has ended (and may deposit more throughout time)
  • The user may only claim back the deposited funds at the end of the pre-defined pooling time. Note that the funds may have been subject to price increases or decreases. Funds are received back in the same token the user deposited.
  • The user may also claim their share of Magnolia (this is only possible at the end of the pooling period + 24hours later)
  • The user does not pay gas for the trading activity

Application to any ERC20 token

  • Note that the contract is open source and may be deployed by anyone (ERC20 token to be specified upon deployment)
  • Note that the deployment is always launching two contracts, one represeting ERC20 - WETH and the other representing the WETH - ERC20 trading pair, so that the both auctions can get liquidty.
  • Note that at the same time also a bot should be run that claims on behalf of the smart contract and triggers the next participation (this is the bot paying gas)
  • Note that though this ensures sell-side liquidity, it is highly advised to ensure the bidder side has also sufficient liquidity to buy up the sell-orders

Code and audit

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