Autonomy’s “AutoSwap”: The First-Ever dApp to Enable Risk Management & Automated Transaction Action Features on DEXes.

The centralized traditional financial market, although with a lot of cons, has had ways to enable risk management in the financial market to prevent drastic losses for traders and speculators.

On the other hand, that is an aspect of the decentralized market that has been limited for a while now.

Looking at how highly volatile and unstable the market can be, is there a way to manage the risk of losses that may occur during various transactions on Blockchain?

Also, can you find a way for your blockchain transactions to be handled when you are not there to carry them out?

That’s where Autonomy comes in.

Autonomy Network is a decentralized web in which you can find the ease of access as a developer and user to transactions carried out on blockchains, by making use of the automatic execution tools provided by the network.

Using the automated tools, users can carry out transactions they give as requests to the Network with a foresight of what might happen in the future.

This is an idea I’ll expatiate on later in the course of this article.

A step deeper into the Autonomy Network uncovers great uses cases. This time, the Network has released AutoSwap into crypto space.

AutoSwap will officially be the first-ever dApp to offer risk management and automated solution features; limit order, stop loss, recurring payment, and impermanent loss protection into decentralized finance (DeFi).

Although the dApp is to first begin its risk management journey on Binance Smart Chain-based decentralized exchanges (DEXes) like PancakeSwap, AutoSwap will also be made available on other chains like Ethereum, Polygon, Solana, Avalanche.

Through the dApp, users of these DEXes will be able to manage the risk of losses on the market and even boost their returns considerably.

And do you know the best part? Since it makes use of automated tools (bots — referred to as aNFTs, that users can buy and own), to effect users-based instructions, users can be offline or on something else, while these tools carry out the instructions.

You may be wondering how these features play a part in DeFi and DEXes. So, I’ll try as much to break this down for you by explaining them individually.

1. Limit Orders

Buying and selling is an integral part of finance and that’s no different in DeFi. When you want to transact on the market, you can either buy or sell at the market order or a limit order.

A market order is a price at which an asset on the market currently is. On the other hand, a limit order is a price at which you want to buy or sell the asset, which is against the current price of the market.

So, let’s presume that the current price of BNB is $350 but you only want to sell your coins when it gets to $360 or you want to buy BNB when it gets to $340. “Selling at $360” or “Buying at $340” against the market price of $350, that is your limit order.

How does AutoSwap come into play?

As a dApp that uses bots (automated tools), users can place a request for the bots to monitor the market and buy or sell when their limit orders have been reached and the transactions will take place even when they are not watching the market.

2. Stop Loss

Because of how volatile the decentralized market is, prices often vacillate unevenly, going up and down. In advanced cases of the market, some speculators trade on the prediction of the rise and fall in the prices of assets on DEXs.

They stake their assets and based on the rise or fall according to their predictions, their assets are liquidated with profits of percentile increase × the number of leverage they based their prediction on.

However, if the market goes contrary to their predictions, their assets will be liquidated depending on the mode of entry (isolated or cross). Sometimes, completely if there’s no stop loss.

(Note: Percentage increase or reduction is stated by the exchange)

Let’s make it clearer. Mr. A predicts BNB to rise from $350 to $360 and he stakes $100 with 10x leverage. If the price increases to $360, and the percentage increase is 10%, he’ll get 10% of the amount he put in × his leverage, which is $10 × 10 = $100.

But if the price falls by 20% or beyond reduction, that means, he is completely liquidated.

Autonomy’s AutoSwap saves the day with the introduction of Stop Loss. Instead of getting into ruins by contradictions to your prediction by whatever percentage, users can now stop their loss at a percentage they can afford to lose.

So, Mr. A. tells his bot on the AutoSwap dApp to take action of stopping his loss, if the market goes contrary to his speculation, at $349 which could be a 1% price reduction.

1% = $1. $1 × 10 = $10. The bot watches the market at effects the actions once the conditions are met and Mr. A. salvages his portfolio from greater loss.

3. Impermanent Loss Protection

In terms of staking, a liquidity provider may encounter a temporary loss of funds due to the volatility in the market of the trading pair.

Protection from impermanent losses is essentially the stop-loss of liquidity providers to discontinue liquidity once the loss has gotten a certain amount.

With Autonomy’s AutoSwap, liquidity providers give instructions to a bot to retrieve their stakes from the liquidity pool once the loss falls to a certain amount. The bot affects this action once the condition is met.

4. Recurring Payment

With the integration of many services on DEXs that may require payments to be made recurrently, users may not like the stress of always affecting these payments once they are due.

For instance, if you wish to stake your coins at certain points in time, pay for certain subscriptions, or perform swaps at designated times, etc., paying visits to get those done can get tiring with time.

With Autonomy’s AutoSwap, you can instruct bots to take action of paying at recurring times.

With Autonomy, this is the first time that bots are set up in smart contracts as NFTs can now be owned and automated to carry out transactions for their owners in their absence.

Several leading Blockchain and DEX projects are already partnering with and integrating Autonomy into their system to improve their services for their user. Projects like SokuSwap, Pangolin, ApeSwap, SushiSwap, etc.

However, the automated solutions provided by AutoSwap are not just limited to trading and DEXs alone. It can also be integrated into Lending protocols, DAO management tools, or even Metaverse, NFT, and GameFi projects.

More and more integrations will be happening on the Autonomy Network. This project is very fast-paced and progressive.

Note: Autonomy’s token will be launching soon. Watch out for its Initial DEX Offering (IDO) coming soon!