AMA Highlights: OpenSwap
By Daniel Dal Bello, Director.
June 18, 2021–6 min read.
On Tuesday 15 June, we welcomed Bruce Chau, founder of OpenSwap into the Hillrise Group Telegram chat for an AMA.
OpenSwap is a one-stop DeFi Hub solution built on Binance Smart Chain that aims to reduce the friction of asset exchanges on different chains through a decentralized bridging mechanism, saving end users cost and time.
The OpenSwap team is also working towards creating ‘True-Value farming’, allowing users to stake assets to generate and receive synthetic stablecoins which can then be used within DeFi.
With its DEX Aggregator, Liquidity Queues, and Hybrid Smart Router OpenSwap will help give traders and liquidity providers an edge in the DeFi landscape.
We were curious to learn more about OpenSwap’s vision of revolutionizing on-chain liquidity.
In this post, we have compiled key questions and answers from the event.
Daniel Dal Bello
Thank you for joining us today Bruce, can you please introduce yourself and OpenSwap?
Bruce Chau
A pleasure to be here. I’m Bruce, recovering enterprise developer, enlightened by blockchain in 2018, and never looked back. OpenSwap is a platform providing users with a choice — choice of any liquidity provider from any chain.
The project began about a year ago during the summer of DeFi 2020 when Uniswap was gaining popularity with its AMM liquidity pools. We wanted to address the two primary issues at the time: slippage and impermanent loss. The idea was to provide on-chain spot market-priced swaps in the form of liquidity queues. From there, we won a grant from the OAX Foundation and have been BUIDLing for nearly a year.
Raymond Reijnders
OpenSwap supports Uniswap V2 and your AMM is a fork of Uniswap V2 (with additional enhancements). The release of Uniswap V3 demonstrates yet again how fast the DeFi space develops.
How do you ensure your product remains relevant and keeps up with the market changes in this fast-paced world of decentralized finance?
Bruce Chau
It’s definitely been a fun ride and DeFi moves super-fast. As the DeFi universe continues to expand, liquidity will only be increasingly scattered across multiple chains and the situation is poised to get worse as more new chains emerge with individual DEXs on each chain.
OpenSwap is committed to becoming the most comprehensive DeFi Hub offering the best on-chain pricing and multi-chain arbitrage opportunities, allowing users to experience revolutionary benefits through optimizing their trades with our unique features, liquidity queues, hybrid smart router, inter-chain liquidity swaps, and of course, DEX aggregation.
Bottom line, the multi-chain issue is here to stay, scattered liquidity is here to stay, so is OpenSwap. We don’t aim to just be a 2021–2022 coin, as more chains will inevitably emerge, we know that OpenSwap will serve as an ongoing technical remedy for ongoing market pain points.
As the DeFi market matures, we believe that there are two major challenges the community is facing.
Firstly, there will not be one chain that rules them all and the gap of moving digital assets across chains will continue to grow. OpenSwap plans to reduce the friction of any interchain activities by bridging digital assets across chains… it doesn’t matter if you are swapping, trading, or wanting to participate in the next exciting project.
And secondly, we all live in the real world. The need to bring real-world data on-chain will be another challenge. OpenSwap hopes to narrow this gap beginning with providing spot market price from real-world data to fulfil swaps through our liquidity queues. By the way, liquidity queues are our unique feature!
Daniel Dal Bello
There are more DeFi aggregators live on the market, such as 1inch, Zapper, Octo.fi, and more, how does OpenSwap compare to them?
Was launching with a focus on BSC a strategic choice to differentiate yourselves from other aggregators?
Bruce Chau
DEX aggregator is actually the boring part of our project. We view it as a gateway for users to access our liquidity queues. Ideally, our dream is to have other DEX aggregators access our liquidity queues directly to provide users with optimal pricing.
At the current state, our DEX aggregator aims to minimize gas. The gas price will be exactly the same as if you had executed the swap directly on the DEX such as PancakeSwap, Bakery, Burger, etc.
We actually developed OpenSwap originally on the Ethereum chain. However, in early 2020 with the boom of BSC and users flocking to that chain, we could not ignore the opportunity to use BSC as the trial for our liquidity queues given the lower gas fee presenting a lower barrier of entry for users.
Our goal will be deploying the liquidity queues back on the Cadillac of chains — ETH as well as other EVM compatible chains such as Moonbeam on Polkadot, Polygon, Arbitrum, etc.
@georgepagonis
OpenSwap documentation mentions that your smart contracts have been audited by Certik, but I couldn’t find any audit report, what smart contracts have been audited — and will all be made publicly available for review?
Bruce Chau
The core contracts (i.e. AMM pools, governance, liquidity queues) were audited by Certik and they are currently in the process of completing the audit for our farms and staking contracts.
We hope to make the audit report public, I’ll get my team to upload it on Gitbook, etc. as soon as it’s ready.
Raymond Reijnders
We noticed that EVM chain support is due for Q3 in your documentation’s roadmap, but slated for Q4 on your website’s roadmap. This will surely be a much-anticipated feature, allowing many more people to try OpenSwap.
Can you tell us more about your plans for EVM support? For example, the timeline and which chains you see as most prominent.
Bruce Chau
I’ll get my team to make that correction on the roadmap. Our goal is to deploy the liquidity queues on EVM in Q3. During this time, we expect the gas fees to be reasonable for users given all the progress that is being made in layer-2.
In Q4, we hope to have our initial inter-chain swaps introduced on testnet for ETH and BSC. We may consider running a bug bounty for rewards during this time.
Raymond Reijnders
Bringing a ‘spot’ trading experience to DeFi has been the pursuit of many and you share a vision of achieving this through the addition of ‘liquidity queues’ and a ‘secure adaptor protocol’.
Although further details have yet to follow, could you give us a general idea as to how you will achieve on-chain spot market pricing?
Bruce Chau
At the core, OpenSwap liquidity queues get their prices from a price adapter voted in by our decentralized governance. We developed a Secure Adapter Protocol (SAP) that provides a framework for developers to add price adapters to OpenSwap. The framework includes an Oracle Price feed from Chainlink (or any other source such as Band, aggregation of multiple sources). From here we introduce a series of “circuit breakers” to help protect users of liquidity queue swaps.
Now, what are circuit breakers you may ask?
The base circuit breaker is the security score of the price adapter contract. With our partnership with Certik, we will use their Certik Shield to periodically scan the price adapter contracts to issue a security score. The minimum security score (voted by governance) must be met for liquidity queue swaps to occur.
Developers may choose to add additional circuit breakers to mitigate risks such as trade size, deviation from AMM pool prices, etc.
Raymond Reijnders
How have you experienced working with Certik on this so far?
Bruce Chau
Certik has been incredible for us. When we first introduced the concept of oracle-priced swaps, they immediately provided guidance on how to mitigate risks with their deep experience and breadth of reviewing exploits across a large number of projects. So in short, Certik is one of the many excellent partners that are helping us in revolutionizing on-chain liquidity.
Daniel Dal Bello
We’ve come across DeFi aggregators that managed to negotiate commission structures with re-routed DEXes, or flashbots for trades via their platform, effectively making it possible to take away fees from the end-users.
We did come across a fee structure for end-users in your documentation, what is your approach to fees, and what is your position on MEV?
Bruce Chau
Of course, with any project, the goal is to minimize fees for users. For our liquidity queues, we will start with transaction fees of 0.1% as we believe this is a good starting point to be competitive with what CEX is offering
Our liquidity queue swaps will execute at the current spot market price, meaning that users will not experience slippage. The added benefit of using spot market prices is that the price would not change due to any swaps against liquidity queues, eliminating the MEV opportunity.
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