Mean Finance is a state-of-the-art Dollar Cost Average (DCA) protocol allowing users to swap one ERC20 for another. You can program actions like "Swap 10 USDC for WBTC each day for 30 days" using this tool. Almost all ERC20 tokens are supported. These token swaps will therefore take place consistently and regardless of the asset's price, lessening the volatility impact on the investment.
Setting up a position in Mean Finance signals your intention to exchange one token for another. The exchange can then be carried out for you by a third party, as long as they respect the desired frequency. You pay a 0.6 percent fee on the amount swapped when they carry out your swap. The swapper and Mean Finance then divide this charge. You would not have to pay for gas because you won't perform the exchange independently.
Pessimistic and PeckShield have audited Mean Finance contracts.
Why use Mean Finance?
It can be incredibly challenging to time the market. The objective of DCA is to lessen the overall volatility impact on the price of the target asset; the investment is not exposed to excessive volatility because the price will probably change every time one of the periodic swaps is completed. DCA wants to avoid the error of making a single, poorly timed lump-sum investment in terms of asset pricing.
You can perform DCA using Mean Finance in a decentralized and gas-free manner. This implies:
- No account is needed.
- Zero trading limits
- No costs for deposits or withdrawals
A stale pair in Mean Finance
Mean Finance encourages other users to complete swaps in exchange for profits. Now, various factors can have an impact on these incentives:
- The general sentiment of the crypto market
- The popularity/demand of the tokens involved in the swap
- The volume of the tokens involved in the swap
A pair is considered stale when parts of its swaps haven't been done for a considerable time.
Therefore, it is possible that your swap will not be conducted at the frequency you have requested. Remember that fees are only charged on swaps. Therefore your balance would not be impacted if this happened to your position.
When will the positions be swapped?
Swaps can be conducted at any time because external users execute them. Let's say, for illustration purposes, that you have established a position using daily swaps. This means that from 00 AM UTC to 11.59 PM UTC, only one execution of your position is permitted. Once executed, a command cannot be re-executed until 00 AM the following day. The same holds for additional frequency, such as weekly or hourly.
When is a gas fee required?
Users only need to pay for gas fee when they interact with the positions. This includes:
- Creating their position
- Modifying their position
- Withdrawing balance from their position
- Terminating their position
- Setting or revoking permissions
Gas costs are not charged to end-users when the swaps are conducted.
Price Calculation for Swaps in Mean Finance
The price at the swapping time is determined by Mean Finance using on-chain oracles. Mean Finance now employs TWAP oracles from Uniswap V3, and Chainlink pricing feeds, but they plan to support more in the future.