Understanding Static and Dynamic Pricing

Dynamic & Static pricing

The first thing to know about pricing on Eve DeFi is that prices are always reflected/calculated in US Dollars, i.e., if you are trading MATIC for WETH, the price is NOT calculated based on MATIC vs. WETH directly like on a typical exchange, it is calculated as the $VALUE of MATIC vs. $VALUE of WETH.

If you find this confusing, keep reading because it will make sense in a moment.

There are two pricing options when you create an offer (Dynamic & Static), we will address Static first because it will help you understand what we mean by prices are reflected/calculated in US Dollars.

Static price

The “Static” price setting is basically a Limit order, i.e., you are creating an offer with a fixed price which you enter manually, in US Dollars.

Example: You are selling MATIC for WETH with Static price setting, the price you enter should be the US Dollar value of MATIC.

Why do we do it like this? This is because Eve DeFi uses ChainLink Oracle Price Feeds, which you can learn more about below.

Dynamic price

When using the “Dynamic” price setting, you do not need to enter a price. Why? Because your offer will be priced based on the US Dollar value of the asset you are selling at the time another trade buys your offer (plus/minus any Discount or Premium you set - see next section).

This price setting is called “Dynamic” price because the price dynamically adjusts itself as the ChainLink Oracle price changes.

Example: At the moment you create an offer, the price of MATIC is $1.00 (according to the Oracle), but no one buys your offer right away. 24 hours pass, during which time the price of MATIC rises by 10% and someone comes along to buy your offer. In this case your MATIC is sold for $1.10 automatically, i.e., you didn´t have to come and adjust the price yourself.

When using “Dynamic” price, you can use the “Discount/Premium” setting which we will explain below after briefly touching on Oracles.