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Update approved tokens list link
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Daniel Sánchez committed Feb 20, 2019
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Expand Up @@ -11,11 +11,11 @@ Bidders are only active during the running of an auction.
There is always only one auction per token pair running (with opposite auctions running simultaneously). All auctions run independent of one another.
When an auction for a token-pairing starts, the initial price is set at twice the final closing price of the previous auction (of the same pairing). From this initial price, the price falls according to a decreasing function. During the auction, when bidders are active, they submit their bid at any point in time at that current price (remember: the price function is decreasing). The bidders are guaranteed the minimum amount of tokens at the price point at which they took part. Bidders can submit bids until the auction closes (where bidVolume x price = sellVolume). Note that all bidders receive the same final and therefore lowest price. Bidders should therefore take part where the current price of the auction reflects their maximum willingness to pay.
Since bidders will only pay the final market clearing price, which is either at their bid or lower, they have an economic incentive to submit the bid at their highest willingness to pay.

Check the section on **interfaces** for ways to participate.

## Liquidity contribution
On the DutchX Protocol, liquidity contribution is levied on users in place of traditional fees.
On the DutchX Protocol, liquidity contribution is levied on users in place of traditional fees.
**These do not go to anyone** (not to Gnosis, or any other party):
Liquidity contribution is committed to the next running auction for the respective auction pair and are thus *redistributed to all users of the DutchX protocol*! It incentivises volume and use of the protocol.

Expand All @@ -25,10 +25,10 @@ Your individual liqudity contribution depends on your amount of Magnolia token h
0.1%-1% of Magnolia held --> 0.3% of liquidity contribution
0.01%-0.1% of Magnolia held --> 0.4% of liquidity contribution
anything below 0.01% of Magnolia held --> 0.5% of liquidity contribution.

**The liquidity contribution could also be positive** for a trader that has lower contribution than other traders in the same pair!

## Magnolia
**The liquidity contribution could also be positive** for a trader that has lower contribution than other traders in the same pair!

## Magnolia
Magnolia (MGN) tokens are intrinsic to the DutchX and lower the default liquidity contribution on the DutchX Protocol.
MGN are automatically generated and credited to users: 1 MGN is credited for trading 1 ETH worth of any whitelisted token pair (and of course trading any fraction of ETH generates the same fraction of MGN).
MGN are locked by default into a smart contract for which the user’s address is associated with a particular balance.
Expand All @@ -39,10 +39,10 @@ Magnolia are not needed to participate as a seller or bidder on the DutchX.
## Whitelist
Whitelisted tokens are those that have the potential to generate Magnolia when traded in a whitelisted pair. The idea of whitelisted tokens is that no token can be added to the DutchX Protocol with the mere intention to create Magnolia and benefit from liquidity contributions.
Whitelisting will - in future - be decided by the DAO.
This is the complete list of the [currently whitelisted tokens](https://github.com/gnosis/dx-contracts/blob/release/2.0/test/resources/approve-tokens/dxDAO_approved_tokens.js) (as per February 2019).
This is the complete list of the [currently whitelisted tokens](https://github.com/gnosis/dx-contracts/blob/master/test/resources/approve-tokens/dxDAO_approved_tokens.js) (as per February 2019).
They were selected based on a legal assessment of token characteristics, which suggest that legislation of major jurisdictions regulating securities, financial instruments or similar and/or mandating customer due diligence procedures do not apply to them at this point in time for the purposes of the DutchX protocol.
Regardless of being whitelisted, tokens will still first need to be added to the protocol before trading is possible.

Note that whitelisted tokens are not the same as **listed** and **traded** tokens. A whitelisted token has the potential to create Magnolia tokens (used for reduction of liquidity contribution) if traded in a whitelisted pair. Tokens can be listed for trading on the DutchX protocol, albeit not whitelisted (and hence trades do not generate Magnolia); on the flip side, tokens could be whitelisted, however not listed/traded on the DutchX protocol.

## GNO
Expand All @@ -65,7 +65,7 @@ In version DutchX 2.0, OWL is part of the DutchX Protocol:
*An example: 1) user takes part with 100A 2) liquidity contribution is calculated, e.g. 0.3% 3) total fees are 0.3A 4) user chooses to settle half in OWL 5) calculation of 0.3A into ETH then into USD (e.g. 0.6USD) 6) 0.3 OWL is deducted (1USD = 1OWL) 7) remainder of 0.3USD (=0.15 A) is taken from the order 8) 99.85A is placed for the user as his/her order. Note that 0.3OWL are burnt and 0.15A go into the next auction as an extra sellVolume*

### How is it used on the DutchX?
- OWL is completely optional to use. You must set an allowance for the smart contract for OWL.
- OWL is completely optional to use. You must set an allowance for the smart contract for OWL.
- OWL is then deducted automatically (available using the same address you are trading from).
- OWL are, however, not needed to participate as a seller or bidder on the DutchX; its use is completely voluntary.

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