đOpen Market Operations
Last updated
Last updated
Protocols might want to buy undervalued assets or diversify overvalued assets into stablecoins. Today, the options available to them in order of best execution are OTC, Aggregators, DEXs, and custom scripts. Each option has corresponding pros & cons listed in the Competition section.
The problems for open market operations are similar to the ones DAOs face, see the DAO page for more details:
Some well-funded DAOs have the engineering resources to put together tools to address the poor execution on-chain. However, this diverts valuable developer time, incurs audit costs, and is generally not as efficient or flexible as TWAMMs.
Imagine re-building a DEX every time you needed to swap tokens instead of plugging into Uniswap.
Beyond the development costs, these one-off tools have 3rd party dependencies and rely on keepers paying the gas to execute the trades. Additionally, they are subject to MEV attack vectors based on the size of sub-orders.
A side-by-side accounting comparing the surplus buffer signal request in DSSKiln vs. TWAMM appears below. This analysis doesnât even account for the fill improvement that would result from the finer grain DCA of 2160 vs. 100 orders.
TLDR; TWAMM would cost ~50% less!
Here are just a few DAOs that have built one-off tools for TWAP-style market operations.
