A liquidation account/ token converter

One of the core features of dfusion is that any token can be directly traded against any other token. A often used pattern in token economics is that a system collects fees in a wide range of tokens but uses those tokens to buy back and burn the protocol token.

This can come with a lot of challenges. Traditional exchanges might not offer that specific trading pair. On dfusion this can be implemented quite elegant:

One contract account would be needed and the only thing this contract can do is to create market orders of any token into a specific protocol token. Those orders would have an unlimited sell amount and would be valid forever.

Now any token that is earned as fees can simply be deposited into the account. The dfusion will take care of the liquidations.

Advantages of protocols that uses this system:

  • no frontrunning issue
  • does not need to be actively traded
  • no gas fees

If no withdrawal option is provided the tokens are effectively burned. Alternatively, there can be a mechanisms to withdrawal the tokens into another contract.