Introduction
Thank you to all of our valued users for choosing ArthSwap. The Astar team is thrilled to announce the initiation of zkEVM as Ethereum Layer 2, alongside other significant enhancements. We’re taking this moment to look back and share our detailed plan for growing ArthSwap. This is a chance for us to explain how we’re going to take ArthSwap to the next level.
ArthSwap has come a long way on Astar Network EVM, which is a key part of Polkadot. Our launch of AMM v3 is a big step forward. We’re also putting in a lot of work on developing WASM. Our aim is to make ArthSwap a powerful Decentralized Exchange (DEX) that brings together and supports liquidity throughout the entire Polkadot ecosystem, all through WASM.
We know that WASM is pretty new and not quite ready for everyone on Astar Network just yet. A lot of you in our community are keen to hear about how it’s coming along. We’re committed to keeping you well-informed about our recent achievements and what we’re planning next.
Executive Summary
1. We’re enhancing $ARSW’s value by making it a “Deflationary Token,” ensuring its value increases over time.
2. Our enhancement of v3 is geared towards significantly boosting trading efficiency.
3. Our aim is to establish ourselves as a leading “DEX on Polkadot” through XVM and XCM innovations.
Shaping $ARSW into a Deflationary Token
Farming Emissions for $ARSW will conclude in January 2024. We’re shaping the future tokenomics with these key strategies:
- Initiating new Farming from “Community Growth.”
- Implementing a Buyback & Burn mechanism.
Redirecting a portion of Trading Volume fees to the Treasury for buybacks.
Our primary goal is to boost Trading Volume, fostering a beneficial cycle:
- The buyback and burn of $ARSW, funded by trading fees, will exceed new Farming emissions, turning $ARSW into a “Deflationary Token.”
- This approach is expected to raise $ARSW’s price.
- Increased Farming Rewards will contribute to stronger Liquidity.
- Enhanced Liquidity leads to reduced slippage, encouraging more Trading Volume.
For clarity, consider this scenario: If we allocate 20 million ARSW for Farming annually, maintain a Daily Trading Volume of $1 million, and the take rate for buyback is 0.4%, the annual Deflation Rate would be around -5.2%. (Note: These figures are hypothetical, for illustrative purposes.)
Enhancing Swap Convenience with AMM v3
It is important to note that AMM v3, compared to its traditional model, significantly improves the efficiency of swap transactions relative to Liquidity, resulting in a diminished price impact. The specifics of how Swap efficiency is enhanced will be detailed in an upcoming article.
The enhancement of user convenience and the escalation of Trading Volume are contingent on the evolution of v3. However, ArthSwap v3 currently faces several challenges:
- Lack of Farming incentives.
- Hassle in migrating liquidity from v2.
- The complexity involved in setting a Price Range position for liquidity provision.
To tackle these, we plan to:
- Focus new Farming mainly on supporting v3.
- Enhance the UI/UX for the “Migrate” feature.
- Introduce a new “Vault” feature for automated position management.
We’ll soon explore the “Vault” concept in more detail. Essentially, it lets users deposit their assets without the hassle of managing positions. A Smart Contract will automatically adjust positions in response to price changes, making the process much simpler for our users.
Evolution to ”DEX on Polkadot”
A major hurdle in the Polkadot ecosystem is the scarce liquidity for each Parachain Token. ArthSwap currently leads in Total Value Locked (TVL) on Polkadot, demonstrating our strong liquidity position.
At the moment, our liquidity provision is confined to Astar Network EVM. We’re planning to broaden our reach across the entire Polkadot ecosystem with the following strategies:
- Launching a Dex with XVM: This will merge EVM and WASM on Astar Network.
- Launching a Dex with XCM: This aims to extend WASM throughout Polkadot, in line with Polkadot’s ongoing development.
In light of this, we remain committed to intensifying our development efforts on the WASM front.
Moreover, we plan to implement collaborative strategies to render our services accessible to users across different Parachains. Recent initiatives include:
- Integrations with prominent wallets, such as Subwallet and Talisman.
- Partnerships with OAK Network for the Stop-limit order feature.
- Collaboration with Bifrost for vDOT.
Analyzing ArthSwap user trends over the past three months reveals a shift: while 80% still use MetaMask, a growing number are adopting SubWallet and Talisman. This marks a significant change from when nearly all ArthSwap users relied exclusively on MetaMask. It’s a clear indicator that our user base is expanding beyond the regular Astar EVM users to include members from the broader Polkadot ecosystem.
This shows that not just regular Astar users who usually use EVM but also users from the Polkadot ecosystem are joining us.
Our future plans are geared towards developing features that capitalize on the unique qualities of each Parachain and strategies aimed at extending ArthSwap’s influence beyond Astar Network.
Development Roadmap
You can view our upcoming roadmap in the following figure. Please note that this is the current plan, but we might adjust it based on how things progress with the Parity and Astar team. We’ll make sure to keep this roadmap updated.
Thank you so much for taking the time to read this. We’re committed to moving forward with our comprehensive strategy and will keep you informed about our developments.
In the Polkadot ecosystem, decentralized operations are gaining momentum, and the influence of the community is growing stronger. We’re eager to engage in Open Governance, contributing to the enhancement of the Polkadot Ecosystem.
Your continued support means a lot to us. Thank you!
