⌛Dollar-cost average orders

Also known as TWAMM. Place orders that execute over time to enter and exit positions more efficiently or even programmatically

TWAMM, or "time-weighted average market maker," is an Ekubo extension which is enables a feature in the interface called "DCA" orders and "DCA-enabled" pools. DCA orders are orders to sell a token at a specified rate between a start and end time. The mechanism involved in executing Ekubo's DCA orders is best described by Paradigm.

DCA-enabled pools are liquidity pools that use the extension to support these orders by providing liquidity for the buy/sell side when DCA orders are imbalanced. In practice, orders are split up to execute every second, netted against each other, and if the ratio of buy and sell orders is not exactly equal to the current pool price some amount of the orders is swapped against the pool. Note that the pool price is very rarely equal to the ratio of the DCA orders; and thus, this liquidity is necessary for DCA orders to get good pricing.

In practice, execution of orders happens up to once per block. On Starknet, blocks are created once every few seconds, so DCA orders are best suited for trades that happen over longer time periods. As block times decrease, orders will be split into more pieces and thus orders can be placed with greater size or shorter duration given the same amount of liquidity.

Orders on both sides of a DCA-enabled pool are netted against each other, and the difference is swapped on the pool to compute the resulting price for the orders.

Ekubo's TWAMM implementation is integrated into the core protocol via Extensions. There are two features in the user interface:

• DCA-enabled pools: liquidity pools that use the TWAMM extension

  • Provide liquidity to these pools to earn fees from DCA orders as well as regular swap volume

  • Concentrated liquidity is not supported for these pools

• DCA orders: orders that sell a token over a specified period for a specific pool

  • Because the price is not known at the time of the swap, "exact output" swaps are not supported

  • There is no price protection--you may stop an order at any time

  • Pricing is efficient thanks to efficient arbitrage

Because TWAMM pools are cheaply aggregated with other pools in Ekubo, and opposite orders are netted against each other, DCA orders provide efficient pricing and lower fees for large swaps, i.e. you are likely to receive the time-weighted average price of the pair on your order.

Consider using TWAMM in the following cases:

• When moving large amounts of capital into and out of positions where the order books are thin

• When converting tokens programatically

• When you want to buy/sell a token but don't want to time the entry/exit

Note that the price you receive on your DCA orders is heavily dependent on the liquidity in the pools and other orders on the pool over the period that the order executes. If you want to ensure good execution, it's best to supply liquidity to the pool on which you want to place the order to limit the price impact of each swap.

Creating DCA orders

The ability to place DCA orders is available in the interface here.

DCA orders pay fees in 2 ways:

• When you stop the order, you pay a fee to the liquidity providers of the pool on which you placed the order equal to the swap fee times the remaining sell amount

• When the orders are imbalanced, you pay swap fees to liquidity providers of the pool on which you placed the order to swap your tokens, depending on how one-sided the orders are

The contracts allow durations between 1 second and 2**32 seconds, but the specified start and end time for an order must follow specific rules to be valid.

Adding liquidity to DCA pools

You can create DCA-enabled pools to support trades of a specific DCA pair providing backstop liquidity to the DCA-enabled pools. This liquidity has exclusive rights to the TWAMM volume. Orders cannot be placed between two tokens until there is at least 1 direct DCA-enabled pool.

This per-second splitting of your trade maximally limits the impact of your trade. All you have to do is specify an amount, and Ekubo will find the best pools to split your trade across, just like it does when you swap on Ekubo. In addition, your order is netted against swap volume in the opposite direction and any volume that need not reach the backstop pays 0 fees, further improving pricing. When you place an order, you will receive an NFT representing your ownership of the order.

Much like the NFT you receive when you create a position: you should never sell this NFT. If you sell the NFT that you get for placing an order, you give up the right to the capital associated with it.

Fees

All fees from the DCA orders are directed towards liquidity providers of the pool on which the order is placed.

DCA orders incur fees when stopped, or when there is no volume on the other side of the trade and the order must be executed against the liquidity pool.

The fees paid to liquidity providers when orders are executed against the pool are like regular swap fees.

In the case of stopping an order, the fee is paid to liquidity providers at the time the order is stopped from the remaining amount to be sold. This serves two purposes:

• Incentivizes providing liquidity where there is already a lot of TWAMM volume

  • Helps with fragmentation of TWAMM liquidity

• Prevents spoofing of large orders