⏱️Smart TWAP

Time-Weighted Average Price

Key Information

• Typically a passive strategy

• Breaks down large, market-impacting orders into smaller digestible chunks

• Usual timeframe for TWAP orders are hours to days

What is a TWAP?

A TWAP (time-weighted average price) is a specific type of strategy that breaks down a large trade into smaller chunks and executes them at regular intervals. The primary aim of a TWAP is to minimize the market impact of your order by executing. In simple terms, it executes your large order but does not affect the market price significantly.

There are a number of factors that can affect the effectiveness of a TWAP strategy. These include the size of the order, the volatility of the asset, and the liquidity of the market. In general, TWAP strategies are most effective for large orders in illiquid markets.

Here is an example of how a TWAP strategy might work. If a trader places a market order for 100 ETH, it is likely that the price of ETH would rise significantly as the order is executed.

However, if the trader uses a TWAP strategy, the 100 ETH could be executed as 10 ETH every 15 minutes. This would help to spread out the buying pressure and minimise the impact on the market price.

Why our TWAP?

This strategy is best-suited for users who want to trade evenly over a set period of time (10 min, 5 hours, 1 day, 1 week etc). Our TWAP will automatically calculate the micro-orders to provide the best possible execution. The optimal clip size is calculated automatically based on the historical data of trade volume and order-book depth to create the digestible chunks for each order.

With Twap.fi, users can seamlessly trade across various cryptocurrencies, choose from a wide array of wallets, access multiple EVM-compatible blockchain networks, and even select preferred aggregators. Twap.fi focuses on extensive customisation in order to continuously improve the trading experience. Twap.fi uses a randomised time volume profile to avoid giving away its trading signals to other traders or bots. By randomising the time at which it places trades, Twap.fi makes it more difficult for other traders to predict when it will be buying or selling an asset. This helps to ensure that users on Twap.fi can trade more effectively and profitably.