Fixed or Dynamic Price

The first thing to know about pricing on Eve is that prices are always reflected/calculated in US Dollars, i.e., if you are trading MATIC for ETH, the price is NOT calculated based on MATIC vs. ETH directly like on a typical exchange, it is calculated as the $VALUE of MATIC vs. $VALUE of ETH. If you find this confusing, keep reading because it will make sense in a moment.

Fixed Price

The Fixed price setting is straightforward; it means the price of the trade offer remains constant and doesn't change over time (a standard Limit order). On the other hand, the Dynamic price setting is unique to Eve Exchange and can be particularly advantageous, especially when creating offers.

Dynamic Price

With Dynamic price activated, as a Taker (someone accepting an existing offer), you won't notice anything unusual except that the price of the offer might change occasionally (typically every 20-30 minutes). This adjustment is not due to the offer creator manually changing the price; it happens automatically through the smart contract.

When you create an offer with a Dynamic price, the smart contract will fetch the price data for the asset you're trading from a ChainLink Oracle. If the ChainLink Oracle's price data for that asset changes, the smart contract will automatically update the price of your offer.

ChainLink Oracle's price assets against the US Dollar, which is why the protocol calculates prices by the $VALUE of MATIC vs. $VALUE of ETH as per the above example. If you still find this confusing, don't hesitate to contact us.

Advantages of Dynamic Pricing

Dynamic pricing offers a powerful benefit; it allows your offer to adapt to changes in the asset's price without any manual intervention.

Let's illustrate this with an example:

Bob creates an offer to sell ETH for USDT with Dynamic price enabled. At the time of creating the offer, the price of ETH was $1800, and Alice quickly buys the ETH from Bob for that price. Now, let's say Bob's offer wasn't taken immediately, and while it was sitting there, the price of ETH (according to the Oracle) appreciates to $2000 per ETH. In this case, the smart contract will automatically adjust Bob's offer price to $2000, reflecting the new market price. Alice, anticipating a further price increase, buys the ETH from Bob at $2000.

In this scenario, Bob didn't need to take any action, yet his offer automatically adjusted to the changing market price, allowing him to get the fair market value without cancelling and recreating the offer.

Please note that by choosing Dynamic price, offers are continuously adjusted based on the Oracle data. Therefore, if the price of ETH goes down rather than up, Bob's offer (selling ETH in the example) will reflect the new lower rate.

It's important to mention that Dynamic pricing is available for assets supported by ChainLink Oracles, which is not necessarily all assets that might be trading on the platform. In some cases, custom Oracles may provide price data from CoinMarketCap in which case the Dynamic price setting is available for that asset, however, if the asset does not have an Oracle, the Dynamic price setting is not available.

For further details, you can learn more about Oracle price data here.