ICONOMI is a second-layer service operating on top of exchanges, so it is crucial for our users to understand how asset prices are calculated.
- Price Fetchers
Price fetchers are services that run on ICONOMI backend and continuously fetch prices for each ICONOMI listed asset on several exchanges. Average prices for well-known assets like BTC or ETH are therefore calculated from up to 16 price sources - the biggest global exchanges.
Our price fetchers continuously listen for price changes on predefined sources. Each time a price change occurs, our fetcher saves the order book depth and updates the price our users see and operate with. This happens every second.
- Average Price
When looking at assets (for example BTC) price on ICONOMI in reality the price represents the average price from top global exchanges. The average price is updated once per second. While users trade BTC on ICONOMI (either buy or sell actions) our trading engine is aware of several order books on different exchanges and forms the average price. This allows our trading engine to select the exchange with the best price and order book depth big enough to execute the desired order.
- Price Deviation
We keep an eye on our average price by comparing the calculated average price generated by price fetcher services with prices available via Coinmarketcap or similar services. In case we detect a substantial difference between the two prices, our backend is periodically notified and we automatically disable affected Crypto Strategies and mark single assets that might trade while the price is deviated and cause any financial damage. Prices are then human checked and if everything is ok, the asset is re-enabled.
- Price slippage notification
When buying single assets the offer generated for the user is also compared to our average price information. If the deviation between average price generated across different exchanges and the immediate price of the current offer is bigger than 5%, the user is notified that there is substantial slippage on the market and the user may forfeit the buying process, returning at the later time when the conditions on the market are better, or try reducing the order amount. This usually happens on single assets with thin order book depth.
Now that we explained how our platform works it is easy to understand that a direct comparison of the price between websites like Coinmarketcap, Coingecko and average price generated by ICONOMI price fetchers is not always reasonable. Coinmarketcap, Coingecko and other websites also operate with longer cache rates due to heavy traffic and are not always up to date with actual prices on exchanges. Even more importantly Coinmarketcap and Coingecko use different price acquisition models (one uses average price while the other uses last trade average).
How do you know what price you will get?
Let's say you want to buy some Bitcoin on ICONOMI. If you open iconomi.com/asset/BTC you will see an average price (as defined in the previous section). If you proceed to buy the asset and enter the desired amount, the last step will show you an offer that is valid for 30 seconds. Why is that? Well as explained in the first section, our trading engine has chosen the exchange with the best exchange rate and enough market depth for your order (this is usually under the average price visible in the first step). We guarantee that the order will get executed with that price shown to the user within a 30-second window. So this is the price you will get.