Wombat 2.0 → Into a New Frontier

8 min readJan 12, 2024

Foundation is Important

The purpose of Wombat has always been to bring a novel DEX algorithm to the masses, but you had to fight a few distinct issues plaguing the DEX market. There are issues with onboarding the masses because the current DEX designs are too convoluted for the end user. Wombat solves this with a single-sided liquidity design and gas-efficient algorithm. Users don’t have to fight with weird LP positions; they have a pure LP token to build upon. Getting Wombat to this point, getting aggregated with multiple aggregators like 1inch, KyberSwap, ParaSwap, OpenOcean, Odos, etc, was not easy. Many people don’t realize that aggregators have a high cost to integrate a new algorithm because there is a lot of testing involved, so a lot would put off or not consider new algorithms until they are battle tested — which means Wombat had to prove to the market that we had a solid design that would withstand the test of time. I call this all Wombat 1.0. If the foundation you build upon is not used, you end up like many DEXs, where they rise high and then burn out because they cannot compete with more significant projects. Sound familiar? Launch DEX on a new chain, massively emit tokens, then the DEX slowly dies because they don’t have any utility. Rinse and repeat, and I don’t think these designs are sustainable or healthy for DeFi or crypto.

I think there are only a handful of unique algorithms in crypto (Uniswap, Curve, Solidly, Platypus, Wombat) — the majority are just forks or slight variants of these. As mentioned above, for DEXs to survive, you need to integrate into these aggregators, or you are a sitting duck out there — why? DEX AMM aggregation is simple from a top-down level. If you are a Uniswap fork, can you have more liquidity than the original Uniswap to grab the route from them? — most likely not. So, the only thing you can do is emit tokens. Still, we all know that eternally emitting tokens is not possible and is a horrible, horrible business model that is not sustainable. Wombat is here to change this.

There is a method to this madness, and I’ll explain it more.

Why It Took So Long

As mentioned previously, the aggregator integration is integral to getting trading volume into your DEX because — if there is no volume, you cannot generate any revenue for it to make sense. Behind the scenes, Wombat was fighting a lot of battles that delayed the shit out of the project. Here is the non-exhaustive list of things you can imagine; besides the dev work, we are inventing new things for ourselves. We don’t have the luxury of forking another project and leaving the analysis or thoughts to another team.

Business Development Work

Wombat has done a lot of BD work, and we now proudly have over 140 assets on seven chains. This is fantastic work for our BD team because we have to spend time in meetings and work on marketing, calculating emissions, and working on the code to work with these partners.

Integration Work Takes A Long Time

Integration is exceptionally tedious. Not only are integrations mentioned above time-consuming, but also integrations with partners and assets that have their specific intricacies. Wombat’s algorithm, which needs some modification to accommodate rebasing tokens, is more complicated on a mathematical level than it seems.

Research Needs To Be Diligent

We get tons of PhDs that approach us and say they have found faults in our algorithm, but it turns out the majority of them didn’t understand some aspect of finance, crypto, or, surprisingly, math to a level and have dispelled all their claims. Many try to extort us, which is unfortunate, but those have also been refuted (which also cost us a lot of time).

Dealing With The Aftermath Of Other People’s Faults

This needs no explanation; many projects we worked with had been hacked and indirectly affected some of our users; much time was spent to remedy the situation.

People Who Fork And Illegally Use Our Code

A few projects out there have forked and illegally used our code, and we had to fight back quite hard. The reality is that they don’t understand the work that is put into developing an algorithm. Once the Business License is over, you can use it, but let me finish developing it. A reason that I appreciate people not using my algorithm is the fact that the majority of people don’t understand it. If some project rugs or is being managed poorly, it makes our design look bad, and dealing with unnecessary stuff is a pain. You would be surprised at the number of people who try to fork us without understanding what they are doing.

Huge Change In Personnel

As mentioned before, there was a massive change in personnel, and the transition took longer than expected.

I want to highlight that many things can go wrong, but we have endured it all and finished what we needed for Wombat 1.0. Proper integration is required to maintain the Wombat trading flow. We’ve done that so that we will go forward with Wombat 2.0.

Wombat 2.0

What is Wombat 2.0? You might ask. Wombat 1.0 is the foundation play, where most trading is more like B2B. These integrations took the most time, but the next stage is to work on the consumers, the B2C — onboarding users to the masses. The majority (>90%) of Wombat’s volume comes from aggregators, and we are usually ranked 20–25th of all crypto trading volume — and this is with just a pegged asset pool. Wombat has yet to release our volatile pool. I expect our trading volume numbers to increase when we release it. Stay tuned.

So, the most essential thing in crypto is the users, and that thought hasn’t deviated from the initial ethos of Wombat. If you step back and think about it, why did I vehemently push single-sided staking? It’s simple and easy to use. Why did I focus so much on a more straightforward and gas-efficient algorithm? It’s simple and works great in getting our route picked up and for users to use our product. Simplicity is an art in itself. Why is the Wombat design so friendly and cute, even though we are a DeFi team focusing on algorithmic innovation? The design is simple, and it’s easy to relate and understand. The math has to be challenging, but using DeFi shouldn’t. Why did we have one of the largest gaming investors to be our lead? Simple.

The future of Wombat now is to onboard the masses to DeFi, and you can only do this with collaborations with GameFi and SocialFi. The following will highlight the upcoming changes to Wombat.

Introducing “WomPets” — Gamified Bribe Market 2.0

WomPets will revolutionize the DeFi space as we integrate and partner with many GameFi and SocialFi projects to increase and cross-pollinate our user bases. GameFi and SocialFi are the keys to onboarding the masses to crypto. DeFi is the key to keeping the liquidity in crypto. Simply put, it is a match made in heaven.

Most importantly, WomPets is here to solve the most significant problem of DEXes — the endless emission battle. In DeFi 1.0, projects were emitting endless tokens to incentivize liquidity providers, all trying to ensure their tokens stayed “liquid.” An illiquid token is nothing but a 0ETH fungible NFT without the art. Andre Cronje brought us the bribe market, which solved part of the endless token emission cycle but also brought a lot of extra complications, work, and inefficiency for both users and projects. Trying to onboard new users with the existing bribe market will result in high user acquisition costs and a mega-low retention rate.

WomPets is the new GameFi design that incentivizes trading, staking, and, more importantly, $veWOM holders — I told you guys I haven’t forgotten about you people!

Through gamification and innovative partnerships, WomPets will bring a brand new sustainable gamified bribe market 2.0 to our partners and get them out of the endless emission loop. WomPets is here to onboard new users, especially gamers, to DeFi. WomPets is designed to combat bots and “emission-hunters” (yes, there is such a thing) that are toxic to the DeFi ecosystem. So, if you deployed a new stablecoin and hope to farm and scam some emissions from DEXes and generate fake TVLs, Wombat is not for you.

You may ask, why WomPets and not Wombat Pets? Let’s leave this part hanging until we release our WomPets NFTs. Then, some of you might be able to ask…

How do you earn points?

Note that points are accumulated over time, meaning the longer you hold, the more points you accumulate.

WomPets NFT Use Cases

Use cases for NFTs — Points accumulation for WomPets games and uses for future games.

What Do You Win?

The Wombat treasury. When the game starts, the points will go towards games where you can win a portion of the Wombat treasury (yes, real existing assets and not some new tokens from thin air)! More different rewards will also be rolling out with our WomPets partners.

WomPets — Airdrop Snapshot

There will be a snapshot of the following groups for the Wombat Pets NFT. There will be a total of 9999 Wombat Pets or WomPets NFTs, and they will be distributed in 9 different stages:

Stage 1, with a total of 1111 WomPets NFTs, goes to:

Holders | Percentage Distribution
$veWOM | 80%
$WOM derivative holders including ($wmxWOM, $mWOM, $qWOM) | 10%
Liquidity Providers | 10%

While most would be airdropped according to top holders by the amount they hold, a sizable portion will be allocated for a random drop to ANY amount of holders (yes, you can win with just 1 $veWOM).

We will have more stages in the future; stay tuned!

Tokenomics Changes

With Wombat 2.0 coming, it’s time to decrease Wombat emissions for a more sustainable future. We have decided to drop emissions for all chains starting next month. The drop in emissions may or may not surprise many — Wombat emissions are still well under our supposed emissions schedule, but we plan to decrease them even more. We have proven on chains like Arbitrum that we don’t need a lot of TVL to do equal amounts of volume as we do on BNB Chain (If you look, the trading volume is pretty similar, but the TVL is quite noticeably different). We are not here to look good with a high TVL. The end game has always been about efficiency.

New Treasury Items

As part of Sable joining the Wombat ecosystem, we have developed a deep partnership that will bring more use cases for Sable. Sable Finance will commit 3% of Sable Tokens Circulating Supply to the Wombat Treasury to solidify the relationship. Also, some of Pyth Tokens are now part of the Wombat Treasury. What does this mean for users? Being part of the $WOM and WomPets ecosystem will reap benefits!

Lots to do and lots to build! Thanks for sticking and staking around.
— Alex