💹 Market Liquidity
Understanding Where and How to Trade AUDD Across Centralised and Decentralised Markets
AUDD operates across two distinct markets: the primary market and the secondary market. The primary market refers to conversions between Australian dollars (AUD) and AUDD, where AUDD is minted or burned directly by our systems. The secondary market refers to all trading of AUDD against other assets, such as stablecoins, cryptocurrencies, or fiat currencies like USD and EUR.
Liquidity in these markets is essential for AUDD’s adoption and utility. For businesses, it ensures that AUDD can be efficiently sourced and redeemed to support treasury operations, settlements, or customer payments. For developers, liquidity underpins use cases such as trading features within applications, access to decentralised finance (DeFi) opportunities, and automated integrations with external providers.
💧 Primary Market Liquidity
The primary market is where AUDD is created and redeemed. AUDD is minted and burned at a fixed 1:1 ratio with the Australian dollar, ensuring its stability and reliability. When a user deposits AUD, an equivalent amount of AUDD is minted on-chain. Conversely, when AUDD is redeemed, it is burned, and the user receives AUD back.
This mechanism makes the primary market the foundation of AUDD liquidity. Businesses and institutions that need to ensure predictable AUD:AUDD conversions can always rely on the mint and burn process. However, this does not cover conversions between AUDD and other assets such as cryptocurrencies or USD. That activity takes place in the secondary market.
🔄 Secondary Market Liquidity
The secondary market is where AUDD interacts with the broader digital asset ecosystem. Here, AUDD can be traded against stablecoins like USDC and USDT, cryptocurrencies like Bitcoin and Ethereum, or fiat currencies such as USD and EUR. This is the domain where AUDD connects with global liquidity and opens opportunities beyond its native AUD peg.
There are two main ways to access secondary market liquidity:
- Centralised Exchanges (CEXs)
- Decentralised Exchanges (DEXs)
Each path offers different benefits and risks, and the choice depends on the requirements of the use case.
🏦 Centralised Liquidity Options
Centralised exchanges that support AUDD are typically over-the-counter (OTC) desks and brokerages. These entities specialise in facilitating large-value trades where minimising market impact is critical. Instead of placing trades in open markets that could move prices, OTC desks match buyers and sellers directly. This allows institutions to trade significant volumes without disrupting price stability.
For businesses, OTC desks are valuable because they provide reliable execution at predictable prices. They also support a wide range of asset pairs and settlement methods. Integration can happen in two ways: via direct API connectivity for automated execution or through trading desk relationships for managed services.
Get Connected:We maintain partnerships with a number of OTC desks and brokerages that can support a range of use cases. If your organisation requires introductions, our sales team can facilitate connections to the most suitable providers based on your needs.
🌐 Decentralised Liquidity Options
Decentralised exchanges (DEXs) operate differently. Instead of matching buyers and sellers directly, they rely on liquidity pools. In these pools, participants deposit assets - such as AUDD and USDC. When other users trade against the pool, fees are collected, and liquidity providers earn a share of those fees.
Important:Returns earned from liquidity pools are not a yield on AUDD itself, but rather compensation for providing liquidity to the market.
While liquidity pools can be lucrative, they carry risks such as impermanent loss, price slippage, and exposure to vulnerabilities in smart contracts. For more information on these risks, you can visit our dedicated blog post.
AUDD liquidity is available through many popular decentralised platforms. On Ethereum, pools can be found on Uniswap, SushiSwap, Curve, and many others. To add liquidity, you can search for existing AUDD pools within these platforms. If AUDD does not appear in a default list, you can manually import its contract address or issuing account, which is available on our Supported Blockchains page. In some cases, you may also create a new liquidity pool if your trading strategy requires it.
🪙 Trading AUDD in DeFi
Beyond providing liquidity, AUDD can also be actively traded in DeFi markets. Trades may be executed as:
- Spot Trades: Settle immediately at the market rate
- Limit Orders: Only execute when the price reaches a specified threshold.
Spot trades are convenient but can sometimes result in unfavourable execution if liquidity is thin. Limit orders provide more control over pricing but may not always fill.
Decentralised exchange aggregators, such as CowSwap and OKX's Web3 Service, improve execution by routing orders across multiple liquidity pools to find the best available rate. For developers, these markets can also be accessed programmatically through APIs, enabling automated trading strategies, liquidity management, or embedded trading features within your own platforms.
🔍 Alternative Primary Market Providers
In addition to our direct AUD:AUDD product suite, third-party providers extend access to AUDD through alternative payment methods. For example, Coinflip enables customers to buy and sell AUDD through their crypto ATM machines in both Australia and the US, while Banxa supports AUDD purchases using credit and debit cards as well as other localised payment methods internationally.
These services may be convenient for businesses or users seeking alternative ways to access AUDD. However, providers typically apply their own processing fees, so it is important to check costs before engaging with them.
Updated 3 months ago