Launching Futureswap v4.1 on Avalanche

We are excited to announce the next version of Futureswap will be launched on Avalanche with Trader Joe as our first AMM! The protocol will use Trader Joe to create leveraged exchanges on the top trading pairs, including JOE-USDC and AVAX-USDC, with other pairs soon to follow.

Futureswap taps into the liquidity of AMMs to create leveraged pairs allowing traders to have leverage and manage risk on any pair listed on the underlying AMM.

Futureswap has opened up the possibilities of doing on-chain leverage on broader, long-tail tokens. The first pair to go live on our newly-integrated blockchain and AMM is JOE-USDC. Other pairs will be quickly added within the following month, with AVAX-USDC being the next supported pair. All new pairs and existing ones already live on the platform, including WBTC and ETH, can be traded with leverage.

This update is an extension of our leverage protocol with added features that make the platform significantly more flexible and composable. The protocol is currently permissioned via token governance, however, the end goal is to allow users to pemissionlessly launch leverage on any token pair on any AMM. This is the next update before that bridge is crossed.

Highlighted updates for this version:

• Swap Adaptor — The core upgrade allows the protocol to integrate with any AMM, including Uniswap v2, Curve, Balancer, Sushi Trident, Trader Joe, and many more.
• Token Rewards — Protocols can permissionlessly add rewards to a listed exchange pair to incentivize more activity. Futureswap is working on an interface for more easily interacting with these contracts.
• Oracle Adaptor — The protocol can now use a Chainlink, TWAPs, or other on-chain price feeds as an oracle.
• Frontend Redesign — Cleaner legibility improvements based on trader feedback, plus the ability to switch between chain networks while maintaining positions across multiple AMMs.
• Multi-Chain Governance Support — By bridging contract calls, Futureswap can now operate fully decentralized across any EVM chain.
• Gas Optimization — Code cleanup focused on quality improvement resulting in better lower gas costs.
• Advanced Order Types — [Coming soon] As new pairs are added, exchanges will have the ability for both stop-loss and limit orders.

Futureswap v4.1 is aiming to be more aligned with token communities by giving them the ability to add leverage and more trading strategies to their token. Leverage adds utility and value to a token, but historically there has been a high barrier to get listed on leveraged exchanges. Any token that is listed on any AMM can support leverage by adding liquidity to our pools, which facilitates the leverage trading using the underlying AMM. Trading on the protocol also benefits the existing liquidity providers of an AMM pair by generating more trade fees on the pool they provide liquidity to.

What Futureswap offers:

• Traders — Traders can now apply their strategies to the broadest range of tokens which increases profit opportunities. Currently, most protocol tokens can simply be bought and sold. Futureswap creates avenues for traders to make money by opening up leveraged longs and shorts, and with advanced trade features such as stop-loss and limit orders, users can create complex trading strategies such as delta neutral farming.

• Liquidity Providers — Token holders can deposit to their own pool on Futureswap and earn trade fees for providing liquidity which allows traders to take on leveraged trades. Futureswap’s LP positions are at low risk of impermanent loss, generating a pool with safe yield for the token holders. Trade volume in Futureswap helps to boost the utility of the token by generating more fees for both the Futureswap pool and the respective AMM pool, thereby generating a higher APY for token holders.
• Protocols — As a protocol, having a Futureswap exchange allows users to manage risk and take on leverage in a way that generates value for the protocol. Protocols can incentivize trade volume on their own AMM pair by providing trade rewards via Futureswap’s trade rewards system. For protocols with a treasury, or other protocol-controlled value, their token can be used as liquidity for a low-risk yield or hedging strategy.

Advantages compared to other leverage exchanges:

• More Token Pairs — Now that the protocol can tap into any AMM pair update, users will have a greater range of pairs to select from. If there is a new token on a supported chain that the community wants, it can be quickly added to Futureswap by voting it in.
• Co-operative Composability — By building this way, the protocol aligns traders, the underlying AMM, and token holders towards shared gain. With standard perpetuals, there’s no benefit to the token holder, as the trading is purely synthetic. On Futureswap, traders are incentivized to support the exchange given the reciprocal trade fees on their respective AMM pool and a higher APY for token holders.
• Economic Security — The protocol has been designed to be economically safe in some key areas. Futureswap uniquely protects traders against price manipulation by using the token’s spot market as the exchange venue. The protocol uses the most liquid on-chain market for that asset and, therefore, trades are backed by the actual asset, which directly impacts the underlying AMM price.

In Futureswap, opening longs moves the spot price up, while closing them moves the price back down. Opposite to that, opening shorts moves the spot price down, and closing them moves the price back up. This means that if a malicious trader attempts to profit by opening a short on Futureswap (price go down), dumping token on spot (price go down), then closing their short (price go up), they are getting a price where they originally opened the short. While they would assume they were making a profit, they would realize the profit is coming from the spot dump — meaning they are essentially dumping on themselves.

In low-liquidity, one-sided markets traders are protected with on-chain auto-deleveraging, a rarely-used but important mechanism to compensate traders whose positions are forcibly closed (learn more here).

Lastly, you can review the most recent full audit for v4.1 here, conducted by leading security experts Trail of Bits. The audit revealed no notable issues.

Creating evolving tools of financial decentralization for permissionless markets is the primary goal through which Futureswap plans to continue growing the platform. Composably supporting all markets to continue adding more functionality for cryptocurrency traders is the foundational building block to the protocol.

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