We're talking more and more about Swop.fi, don't you think? It's a good thing, we want to say because we too, it turns out that we use it more and more. Imagine a AMM as uniswap, except that it would be cheaper and faster! Are you tempted to use this DEX on Waves?
Well, then this article is timely. Today we are going to present Swop.fi to you and you will see that you will quickly adopt it. Launched in November 2020, the project has so far attracted over $40 million in liquidity, and the weekly trading volume is around $25 million. Which is huge and continues to grow and gain satisfied users.
Presentation of Swap.fi
Swop.Fi is based on the Waves blockchain which, although it has been around for quite a few years now (since 2016!), is starting to gain a lot of interest from users. We have been early investors in Waves and we are happy to see the ecosystem growing like this.
The advantage of working on Waves? Transactions can be processed on the blockchain in seconds with network fees for a smart contract invocation costing only 0,005 WAVES (0,09 cents at the time of writing this article - August 2021). It’s nice when you think of the staggering fees on Ethereum during peak hours…
Services on Swop.fi
If you are already familiar with using Uniswap, you will have no trouble understanding how Swop.fi works. It's really very similar, again.
You can trade tokens registered on the Waves network. This expands regularly and new tokens are added constantly.
You can also do Liquidity Mining and participate in liquidity. Some pairs offer an APY of up to 50%, earned in addition to transaction fees. This can be interesting for people who want to become a liquidity provider. Let us add that in addition, the network is experiencing ever greater popularity.
How to register and log in on Swop.fi?
To use Swop.fi, you will need to connect it to your Waves Wallet. If you don't have one yet, don't worry, you can create one directly. You have 3 options to do it according to your choice:
- Waves Exchange Email : This is the easiest way to connect. This is what we chose for example. No need for KYC, it is done quickly and you can use it immediately.
- Waves Exchange Seed: There you can log in via the Waves Keeper web app.
- Waves Keeper: There you can log in via the Waves Keeper browser exemption, which is just as convenient as email otherwise. It's a bit like with your MetaMask. If you think you will use it regularly, then this might be something to consider.
Liquidity pools on Swop.fi
Le DEX Swop.fi has different types of liquidity funds for volatile assets and stablecoins. Each liquidity pool is managed with a smart contract. The exchange rate is determined by algorithmic prices and depends only on the number of tokens locked in the smart contract. This makes it a strength in terms of price balance for Swop.fi.
In fact, you can only add liquidity in a token of your choice (currently this applies to USDT-USDN and USDC-USDN pools). And, a portion of the Neutrino assets (USDN, EURN, NSBT) held in the funds are automatically stacked to increase revenue for liquidity providers.
This is why Swop.fi is said to be a kind of hybrid version between a traditional AMM and an investment platform.
Currently, Swop.fi has 12 liquidity pools for instant trading of the most popular cryptocurrencies on the Waves blockchain such as USDT-USDN, WAVES-USDN, ETH-USDN or SWOP-USDN.
What is the difference between the “Share token” and the SWOP?
On the platform, you will find what is called the “Share Token”. It is a bit like the LP (Liquidity Provider Token) found on other platforms. It is in fact an accounting tool that represents your share of the total liquidity of the pool. You get these tokens when you add liquidity and return them when you remove liquidity with the fees collected and the related rewards.
As for the SWOP token, it is the governance token of the protocol and it also and naturally constitutes a special incentive to attract liquidity providers.
SWOP is a governance token and holders can then take part in important decisions of the project as a whole. We can even decide on the distribution rates of farming rewards etc.
How to buy SWOP token?
We are on Waves and in fact, to buy SWOP token, the ideal would be to go to the exchange platform that is Waves.echanges.
There, you can deposit BTC for example or buy directly by bank card (via the Advcash payment gateway). The platform is very intuitive to use with a pleasant interface.
Note: We will talk about this again in a future article dedicated to the Waves.Exhanges platform, but you should know that you can also have a yearly return of 12-15% on the USDN. This is the " lambo Invest » offered on the platform.
The rate is 1:1 for the USDT/USDN exchange and this is managed by smart contracts. The OTC fee is 2% when you exchange USDT for USDN and 2% when you do the opposite exchange.
Likewise, the platform provides you with a personal manager who will answer all your questions 24/7.
What are the fees on Swop.fi?
Swop.fi offers different fee pricing plans that are tailored to each specific token pair. There are two formulas that will determine the fees. the Constant Product Market Maker (CPMM) formula with a commission of 0,3% of the exchange value and the Flat formula with a commission of 0,05% of the swap value.
For more information on CPMM and Flat formulas, it is recommended to read the pricing article published on Medium.
A total of 6 million total SWOPs will be issued by 2070, of which only 3 million will be available in the market over the next two years. It should also be noted that one million SWOP will be gradually paid out as an exclusive pre-launch reward for liquidity providers.
Become a liquidity provider on Swop.fi
Trading fees accumulated in the group
Staking Rewards (for groups containing USDN, NSBT or EURN)
Rewards in SWOP, Swop.fi governance token.
For pools containing Neutrino assets, fees are charged for adding or removing liquidity to cover fees for participating and non-participating trades performed by the pool's smart contract. Providing larger amounts of liquidity is more cost-effective, since fees are fixed and do not depend on volume.
The other very interesting element of Swop.fi is the fact that you can also automatically generate additional income, for example around 11% per year for USDN. This will depend on the pools you choose, of course.
What is gained by providing liquidity?
Liquidity provider (LP) revenue is made up of several elements:
- Gaming rewards also enter the pool and add value to the overall liquidity, as do fees.
- In addition to other rewards, liquidity providers are rewarded in the form of SWOP tokens
Liquidity providers can stake their received tokens to provide liquidity and receive SWOP token rewards. Currently, the APY profitability of farming on swop.fi oscillates between 51% and 257% depending on the pools, which is very interesting, you will agree.
How to earn SWOP (Mini Guide):
For example, in the USDTLP/USDN pool, you can get a null return of over 100% on a USD deposit. Here are the steps to follow:
- 1/ Create an account on Waves.Exchange (skip this step if you are not new to Waves)
- 2/ Get USDT and USDN on Waves.
- 3/ Deposit your USDT on Waves, trade and receive USDTLP as a bonus
- Now instead of steps 2 and 3, just buy USDTLP in the USDTLP-USDN pool, which might be more lucrative.
- You can also provide liquidity to the USDTLP/USDN pool on Swop.fi.
- Once you have deposited cash, you will then be able to farm your SWOP rewards.
- Currently, the APY is around 60%. There are three elements included in your reward:
- A reward in SWOP tokens
- USDN staking reward
- A portion of the commissions from transactions made on the pool based on what you have deposited.
Note: The estimated increase in the price of USDLP due to USDLP participation is approximately 50% per year (note that this results in a non-permanent loss of approximately 2%).
Final word on Swop.FI
Swop.fi aims to simplify the operation of a DEX AMM by being completely transparent. For example, they published an article to explain to us how their APYs can be as high and give us the algorithms behind it. Frankly, we appreciate this transparency and clarity not so common in the crazy world of DeFi.
On the investment side, this opens the world of farming to "small" investors who can't afford to pay excessive ETH fees. Really, we are behind and confident in this type of project. This is just our opinion of course.
- Discover Swap.fi
- Learn more about Liquidiy Mining
- The 5 best DEXs for decentralized trading
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Disclaimer : This article is provided for informational purposes only. This is not financial, legal, tax or investment advice. Always do your own research before investing in a project.
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