How Does a DAO Execute a Large-Scale Diversification Trade without Crashing the Market? ⎊ Path

How Does a DAO Execute a Large-Scale Diversification Trade without Crashing the Market?

The DAO typically executes an Over-The-Counter (OTC) trade with an institutional counterparty or a specialized market maker. OTC trades are conducted privately, off-exchange, minimizing market impact and slippage that a large on-chain swap would cause.

The DAO can also use a series of small, time-weighted average price (TWAP) sales to gradually liquidate the tokens over a long period.

How Is ‘Volume-Weighted Average Price’ (VWAP) Used as a Benchmark for Trade Execution?

What Is a Time-Weighted Average Price (TWAP) Oracle?

What Is ‘Time-Weighted Average Price’ (TWAP) and When Is It Preferred over VWAP?

What Is a “Time-Weighted Average Price” (TWAP) Oracle and Why Is It Preferred over a Spot Price Oracle?

What Are the Trade-Offs between Using a TWAP and a Volume-Weighted Average Price (VWAP) Oracle?

What Is the Difference between a Time-Weighted Average Price (TWAP) and a Simple Spot Price?

What Is a Volume-Weighted Average Price (VWAP) and How Does It Differ from TWAP?

How Do Options Platforms Handle Oracle Downtime or Latency?

Glossar

Diversification

Allocation ⎊ The strategic distribution of capital across a spectrum of assets ⎊ cryptocurrencies, options contracts, and financial derivatives ⎊ represents a core tenet of risk mitigation.

Minimizing Market Impact

Impact ⎊ Minimizing market impact, particularly within cryptocurrency derivatives and options trading, represents a core tenet of sophisticated risk management and algorithmic execution.