Consensus & Stability
Consensus
Consensus mechanisms and stability frameworks are integral to the operation of Exxa funds. Governance is conducted through a decentralized voting process, allowing stakeholders to propose and approve fund adjustments. This approach ensures transparency, fairness, and inclusivity in fund operations and asset selection.
Stability
To maintain stability amidst market volatility, Exxa employs advanced algorithms and systematic fund recalibrations. These methods provide a balanced representation of asset performance and protect fund integrity.
One of the key tools for stability is the Exponential Moving Average (EMA), which smooths short-term price fluctuations to present a reliable long-term trend. The EMA is calculated as:
where:
EMAt is the EMA at time t,
α= 2/n+1 is the smoothing factor, derived from the chosen time period n,
Pt is the current price of the asset, and
EMAt-1 is the EMA from the previous time step.
To further enhance stability, Exxa integrates mechanisms such as Time-Weighted Average Price (TWAP) for fund pricing. This method averages prices over specific time intervals, reducing the impact of market manipulation or abrupt price changes. Together, these frameworks ensure that Exxa funds remain robust, consistent, and reliable, even in dynamic market conditions.
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