Pricing

Root DEX has a unique approach to price acquisition on the blockchain, addressing the issues typically found with other methods.

Root DEX primarily relies on Chainlink price feeds but also incorporates the most recent prices from centralized exchanges. This strategy improves upon the limitations of Chainlink and centralized oracles, ensuring a more efficient and precise pricing mechanism. It's crucial to note that during volatile market conditions, the Chainlink price may diverge from the weighted average price from centralized oracles.

Selection of Index Price

The index price is derived from the weighted average price on centralized exchanges. The USD index price is obtained from USD exchanges such as Coinbase, Kraken, and Bitstamp, while the USDT index price is derived mainly from USDT exchanges like Binance, Huobi, OKX, and Root DEX.

The formula for the index price is as follows:

Index Price = (A's Quotation × A's Weight) + (B's Quotation × B's Weight) + (C's Quotation × C's Weight)

Root DEX may choose to temporarily exclude certain exchanges from the index price calculation under the following conditions:

1. The most recent quotation from the exchange remains unchanged for more than 1 minute.

2. The exchange quotation deviates by more than 3% from the average of the other quotations.