Decentralized Finance and its many protocols
50% of the world’s population lacks access to bank accounts and financial services. As shocking as that sounds, it is the staggering truth. In such a landscape, Decentralized Finance, although a nascent sector, sees plenty of potentials. Over the last few years, DeFi and its applications have made immense progress with over $12 million in locked assets. With its protocols and Dapps, several flaws in the traditional financial systems were mended.
Now, Decentralized Finance hosts hundreds of protocols holding millions of dollars in funding. From providing proficient platforms for lending and borrowing, yield farming, liquidity providing, swapping to trading on exchanges, DeFi has left no stone unturned in the traditional financial sector. The DeFi space is still developing and launches innovative protocols often. One such idea has taken form – The DeFi Swap Protocol.
The novel DeFi Swap Protocol
DeFi Swap is the latest brainchild of Cryto.Com, a developmental organization committed to empowering users to claim their rights in managing finances with DeFi and Blockchain technology. DeFi Swap happens to be their most recent endeavour.
DeFi swap allows users to swap and farm certain DeFi tokens for the best rate available in the market. This is made possible by taking advantage of audited protocols that offer the best yields. Users who provide liquidity to the pools are incentivized sufficiently through triple yield, explained down the line.
The DeFi swap protocol follows a simple mechanism for swapping tokens – Constant Product Formula. According to this protocol, the product of the two tokens being swapped, in relation to quantities, must remain the same before and after the swap is executed. The price slippage depends on two factors – the ratio and quantity of tokens in the pool.
Cardinal features and functions of the DeFi Swap protocol
- Swapping – By paying a minimum swap fee of 0.3%, users can swap between any two supported tokens. The tokens can be swapped directly if there is an existing liquidity pool between them. If it’s not available, then trading routes across other liquidity pools are found. Take, for example, a user who wants to swap between ETH AND USDT. In the absence of a liquidity pool, ETH is first swapped with LINK and then to USDT to get the desired result.
- Pools – Every liquidity pool within the DeFi swap protocol has conservatories of two ERC-20 tokens, say DAI and ETH. Every liquidity provider receives an ERC-20 pool token that represents their contribution towards that particular pool. The token holders are entitled to the swap fee paid by the protocol users if the corresponding liquidity pool has been used.
- Boost – Liquidity providers can view, increase and claim their CRO DeFi Yield and LP Yield. Users of the protocol can also stake their CRO tokens to increase their CRO yield.
- Annual Percentage Yield (APY) – With the protocol, users can estimate their APY with a calculator by specifying the planned liquidity provision, CRO Staking amount, and the time period.
- Analytics – Users can check the analytics of their tokens, which includes liquidity and trading volume. All this information can be viewed via a web app.
Liquidity provision on DeFi Swap
Interested users have the provision to provide liquidity for any pair of tokens on the protocol. The process is pretty straightforward, and the incentives the platform provides are tempting enough. It goes like this –
- Every liquidity pool within the protocol consists of a pair of ERC-20 tokens. For any LP who contributes, an LP Token is provided that represents the underlying assets
- Users will have to begin by integrating their wallets to the DeFi swap protocol
- This is followed by selecting the specific pool into which they’d like to contribute to and then proceed select the individual tokens
- After this, the number of tokens can be decided on, and the input is given.
- Before proceeding further, users can have a look at the prices and information on pool share
- The user can move to approve the transaction, after which the tokens are supplied to the pool
- Once the transaction is processed and supply has been made, users will receive LP tokens, which can be withdrawn to redeem the underlying collateral
Liquidity providers are in for a slew of incentives known as Triple Yield incentives, which entitles them to –
- Swap fee-sharing – The swap fee users pay can be redeemed by LPs by turning in their LP tokens
- CRO DeFi Yield – For liquidity providers who stake CROs
- Bonus LP yield – For providers in selected liquidity pools
Token swapping in DeFi Swap
Like the workflow of supplying liquidity, swapping tokens, one of the DeFi Swap protocol highlights is quite simple and accessible to users. As iterated earlier, two supported tokens can be swapped for a fee of 0.3%. If a liquidity pool is already present for a said pair, the swap takes place immediately. For others, the protocol takes other routes to initiate swaps. Take a look at the simple and accessible process.
- Users will have to connect their DeFi wallets to the DeFi swap to initiate swapping.
- After getting on the protocol, users can move to the swap tab and type in their input and output tokens
- After specifying the details, the swap can be initiated
- Here, users can review their request by checking the token price, minimum received as a result of slippage, and the swap fee they’ll be paying
- After this, the swap will take place, and the transaction can be confirmed through the wallet.
Here’s a list of tokens that are currently available for swapping on the DeFi swap protocol
- Ethereum/Wrapped Ether (ETH/WETH);
- Tether (USDT);
- USD Coin (USDC);
- Dai (DAI);
- Chainlink (LINK);
- Compound (COMP);
- Crypto.com Coin (CRO)
- Yearn. Finance (YFI)
- Wrapped BTW (WBTC)
- Uniswap (UNI)
- Aave (AAVE)
- Curve (CRV)
Develop Your Own Decentralized Finance (DeFi) Protocol Like DeFi Swap
If you’ve read this far, it is safe to assume that you are interested in developing and launching your own platform like DeFi Swap. At Infinite Block Tech, we have identified the DeFi swap protocol as a lucrative project that is sure to take your DeFi business to outstanding heights. At the time of writing, over $37 million is locked as a value within the protocol. And since numbers don’t lie, it is safe to say that developing and launching a protocol like DeFi swap will prove fruitful.
At Infinite Block Tech, we have catered to several clients over the years who are more than satisfied with our solutions. Our Decentralized Finance (DeFi) Protocol Like Swap services has been tried and tested, the smart contracts audited, and technology updated. And since our services are 100% customizable and scalable, your business is guaranteed to progress within the DeFi space.