Link to Buy with Credit Card on MyDoorWallet.com
Both options are very similar and use the same liquidity pool USDC/DOOR. Essentially, you are using USDC to buy DOOR Coin. The major difference between Uniswap and Matcha.xyz - is that Matcha.xyz offers the option for a Limit Order where you can make sure you lock in the price you want to pay.
Why do I need to use Limit Order?
One of the unfortunate things about open markets (much like the stock market) is anyone can “front run” your trade. Usually with crypto it’s a bot. What happens is these bots look for bigger trades among thousands of coins, and try to buy and sell immediately after your trade - essentially making you spend more money for your DOOR Coin. If you don’t set your Limit or make sure your slippage is set low - they can force you to pay a bit more - and they take the difference.
Here is an example of a bot buying and selling within seconds, to front-run a trade.
Slippage
Slippage is a setting in Uniswap where you determine how much you are willing to pay over the current price of the token to ensure the purchase is successful. Just like buying stocks, if you say “I am willing to buy this stock for $10.50”, and a few seconds before submitting your buy order the stock goes to $10.75 - your order will not execute until it comes back to $10.50.
Unless the token you are trading is doing a lot of volume and transactions, you don’t need to set the slippage higher than usual. In fact, you should set it to .10% or lower.
Of course, if you use Matcha.xyz, you can use their Limit Order functionality to make sure you pay exactly the amount you are bidding.
The screen below is from Matcha.xyz. Click the Limit tab, set your price willing to pay and this reduces the threat of a bot front-running your trade.
Understanding the Liquidity Pool
One of the reasons why you are able to buy and sell DOOR Coin on Uniswap and Matcha.xyz is because we setup what is called a “Liquidity Pool”. It works very much like a market maker works in the stock market. In order for one person to sell their tokens, there has to be another person willing to buy. Of course, this is not easy to do real-time unless there is an existing liquidity pool to allow for these trades to happen.
The DOOR Liquidity Pool is made up of USDC and DOOR Tokens.
Essentially, if someone buys DOOR using USDC - then DOOR comes out of the liquidity pool, and the USDC goes into the liquidity pool. And inversely, if someone sells DOOR - then DOOR is put back into the liquidity pool, and USDC comes out of the pool.
The strength of a token is a combination of the number of holders, daily volume and the balance of the pool. With any new token, obviously all these numbers start at zero - but over time with a strong community and true utility these numbers grow.
Do Bots effect Market Price of Door Coin?
Although Bots can force a specific trade to pay more than market price, it doesn’t effect the overall price of the coin dramatically. You may see a spike up and spike down (depending on how much the Bot buys/sells) - but it doesn’t drive the price below market price at the time.
Here is an example of a Bot that recently purchased $112,134 in DOOR token and then immediately sold for $112,285. The end result is they only made $151 but they moved the price way up and then down again due to the amount of the two trades.
The end result, is the bot make a little money off the buyer who didn’t set limits - which sucks for the buyer - but overall doesn’t really move the price of DOOR Token.