How Set Protocol auction works?

I’m trying to figure out how Set Protocol auction work, read this article but still have many questions. I understand what rebalance is and that the idea is to improve liquidity, but:

* basically how the rebalancing phase works?
* what are the over (under)-collateralized token?
* what is the pro/cons of auction for a Set creator compare to market orders?

Let say a Set need to sell 10 WBTC and buy 100 ETH.

>Once the proposal period ends, the Set enters the rebalancing phase. During this time, buying, selling, issuing, and redeeming are all paused, and the over-collateralized token(s) are traded for the under-collateralized token(s) in a dutch auction by liquidity providers. During the auction process, traders can submit bids to swap the new components of the Set for the old ones. Over time, the price becomes more and more favorable to traders as the auction goes on which ensures that the rebalancing reaches completion.
>A range of independent individuals and groups participate in this open auction process including market makers and the Set Labs team.


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