Impossible Finance Research Report #13 — Ruby.Exchange

SKALE Network can be seen as a highly expandable multichain blockchain network that serves as a secure Ethereum scalability solution. Unlike most Layer 1 and Layer 2 networks, the construction of the SKALE network is designed to aid in the development of an ever-expanding set of dApp-specific chains. With just a MetaMask or EVM address, users can hop from Ethereum Mainnet to SKALE chains, as well as between various SKALE chains itself, where the benefit of frictionless cross-SKALE-Chain transfers can really be seen. In the future, expect further implementations of bridges to allow users to hop from various L2s to SKALE. This would provide project teams with the ability to run dApps on a scalable and fast chain made exclusively for specific ecosystems, which would be similar to subnets or supernets on Avalanche and Polygon.

How SKALE really stands out from other chains is their belief in providing solid and efficient infrastructure in supporting and building towards a multi-chain future. SKALE recognises the importance of having the ability to move assets between different L1 and L2 solutions. With so much going on in crypto, and users being on so many different chains, having quick and efficient infrastructure for users to move funds and assets to respective chains are crucial in determining the chains success. For example, the introduction of Avalanche’s mainnet bridge during their liquidity mining program highlighted to many users the importance of having a good bridging experience.

The ability to move funds in a seamless and user-friendly manner heavily dictates a user’s experience on-chain. It also plays a huge role in whether or not a user will continue using a chain or whether it’s a barrier to entry. Unnecessary delays within the bridging process pose a serious threat to this vision, and one example of this can be seen within the release of Arbitrum’s Mainnet Bridge in early September. The bridging experience was clunky, slow and withdrawals back to Ethereum mainnet required a 7-day wait time, and thus TVL growth during Arbitrum’s inception was relatively slow despite its popularity. As more external bridges, such as Synapse, implemented bridging options in and out of Arbitrum that took less than a few minutes, Arbitrum’s TVL skyrocketed and the popularity of the chain with it. SKALE is able to achieve similar feats in regards to its bridging standards, with the implementation of SKALE’s IMA bridge allowing users to move in and out of the ecosystem in a matter of seconds. As well as being fast, SKALE IMA’s bridge does not compromise on security, transparency and decentralization. With Ruby and the IMA Bridge both being hosted on the Europa Hub Chain, it enables users to migrate funds within a frictionless one-click bridging experience.

Finally, SKALE has been able to provide completely free transactions for its users, as such removing another barrier to entry as users who bridge over to a new chain may not have the gas tokens necessary to begin utilizing the various different dApps. In addition, it further enables a greater number of users to participate in the ecosystem, as networks like Ethereum price out many users due to their high gas costs, especially when the chain is congested. By enabling free transactions, the NFT use case can be further explored outside of just the typical use-cases we currently know of.

With the benefits listed above, Ruby is able to position themselves whereby they can take advantage of the technology SKALE provides, coupled with their strong connections and first mover advantage, we can see Ruby not only accelerate the growth of SKALE but also be the main reason users move over.

Project Overview
Introducing Ruby Exchange, a next generation Automated Market Maker (AMM) aiming to help attract and enable DeFi users on SKALE. Ruby Exchange has been able to strategically position themselves to capitalize on and capture the growth of SKALE in the future, as SKALE does not currently have a competitive, robust Automated Market Maker to serve as a foundation upon which DeFi is able to prosper and grow, and thus SKALE has yet to see an influx of DeFi dApps.

A dominant Automated Market Maker is often seen as one of the strongest catalysts for DeFi growth, with AMMs often securing one of the highest TVLs on their respective chains. Users often interact with AMMs the most, and the composability provided by both traditional AMMs and next generation AMMs such as Ruby Exchange, is what helps generate the largest DeFi activity and therefore yield.

Ruby Exchange can be seen as a next-generation AMM due to the implementation of services that aim to solve the main pain points of DEX migration and user retention. Ruby Exchange will aim to improve the user experience of DEX migration by introducing ‘1-click’ bridging, swap and LP-migration. Ruby Exchange has been able to take advantage of SKALE’s MetaMask native RPC. This allows the permissionless transfer of all ERC compatible tokens, thereby allowing the 1-click process to help increase both trading volume and liquidity provision on Ruby Exchange.

Ruby Exchange also aims to improve both user intention and engagement by introducing a social aspect to AMMs, by introducing user profiles and social sharing within Ruby Exchange. When compared to Centralized Exchanges, referral linking and trade sharing are one of the highest engagement actions taken by CEX users on social media. However, most dexes have not taken steps to implement or provide users with the tools or features to interact and engage with one another on social media, thus allowing various DEXs the incapability of continuously growing in terms of a user standpoint. Ruby Exchange will eventually implement and incorporate a social aspect in terms of user profiles, user NFTs and referral links, providing users who engage using this social aspect with rewards in the form of boosts or other features bundled with $RUBY token lockups.

Finally, Ruby Exchange will implement integrated charts and analytics within the DEX itself, with TradingView API based charts and advanced analytics behind a $RUBY paywall. In the future, Ruby Exchange will continuously innovate its ‘Advanced Trading’ tab, with the eventual implementation of features such as LP liquidity additions and removals as well as tradeflow.

Project Highlights

• Partners and Investors include NGC, Flow Ventures, Wintermute, SKALE Ecosystem Fund, Morningstar Ventures, Yield Ventures, HashKey, CitizenX, ZBS Capital and a significant number of angel investors.
• $2.8 million worth of funding secured from Seed and Strategic Funding Rounds

Quick Metrics

• Public Sale Token Price: 1 RUBY = 0.25 BUSD
• Total Token Supply: 200,000,000 RUBY
• Launchpad Sale Hard Cap: 550,000 USD (split into multiple pools)*
  - Standard pool: 250,000
  - Unlimited pool: 250,000
  - Whitelist allocation: 50,000

Investment Thesis

Introduction of Innovative Gamified NFTs:
Building on three years of development in the AMM space, Ruby incorporates the latest technologies and trends within the blockchain world, and will be implementing gamified NFTs within its AMM ecosystem and framework. At launch, Ruby’s gemstone NFTs will provide three different permissioned rewards: Reduced Fees, Reward Boosts, and Reduction of Unlock Penalty. The introduction of these rewards within Ruby’s Gemstones NFTs aims to provide substantial benefits to power users in the form of both traders and liquidity providers, with eventual utility additions to Ruby’s gemstone NFTs.

The reduction in trading fees for example, will be extremely beneficial for high-volume traders, and a user’s gemstone category can help reduce the commission fee (from a default of 0.3%) on every swap. The reduction of commission fees will vary depending on the rarity of the Gemstone itself, with the rarest Gemstones allowing users to enjoy swaps with 0% trading fees. Furthermore, there will be no introduction of limits on the size of the swap these NFTs apply to, allowing it to be extremely sought after by traders with larger size.

Moreover, the implementation of benefits within Ruby’s Gemstone NFTs such as reward boosts and the reduction of unlock penalties will introduce a gamified aspect for liquidity providers on Ruby Exchange. For example, the introduction of the reduction of unlock penalties will be beneficial as it essentially provides liquidity providers access to higher rates of rewards with less delay and in a shorter period of time. Rewards claimed by liquidity providers are generally locked for a three month vesting period, but liquidity providers are able to opt out at any time to receive their rewards immediately at the cost of a 50% exit fee. However, the introduction of the reduction in unlock penalties gemstone helps reduce this penalty, allowing liquidity providers to be more flexible when deploying their capital.

In addition, liquidity providers receive 0.25% of the total 0.3% trading fee by default. This is implemented at the time that liquidity is deposited to Ruby’s AMM pools: A proportion of LP tokens is minted to the liquidity provider, and a proportion is allocated to the RubyMaker contract. The LP Rewards Gemstone NFT increases the proportion of LP tokens allocated to the liquidity provider, ensuring they receive a greater percentage of every swap conducted on the platform.

Introduction of Europa to Improve User Experience:
The introduction of Europa aims to optimize the SKALE V2 user experience, by providing a community-run liquidity hub and gateway into the SKALEVERSE. Due to the open and permissionless nature of the SKALE network, liquidity fragmentation is an issue as every bridge from Ethereum mainnet will have its own token wrapping standards. This could cause significant issues in the long term as there are risks of creating an ecosystem with numerous incompatible versions of popular tokens (USDT, USDC, BTC, ETH), whereby a version of stablecoins such as USDC or USDT may work with one dApp but may not be supported by another. However, the introduction of Europa addresses this issue by creating a default mainnet bridge on a community-controlled SKALE Chain, thereby ensuring agreement around common token wrapping standards for the whole SKALE network without relying on any centralized services. Having DeFi hubs such as Europa will allow the concentration of all these projects into one chain, despite SKALE already having infinite scalability.

In addition, to ensure independence and decentralization within Europa, the chain will be managed by a group of major stakeholders from the SKALE community, including validators, dApp developers, foundation representatives and ultimately the formation of a DAO. Thanks to this shared control and the chain’s proximity to mainnet, there is also an opportunity to create the first SKALE Hub: A cluster of dApps that cater to a certain market sector or set of user needs. Since Europa will be the entry point to the SKALE network for most users and their tokens, it makes sense to create Hubs consisting of several liquidity-related dApps, giving users everything they need to get started on their journey into the SKALEVERSE.

Future Roadmap
Ruby Exchange plans on continuously innovating and providing new features and experiences for its power users, from the implementation of various integrated charts to increased advanced analytics in the form of liquidity additions and removals, as well as tradeflow. Ruby Exchange will also implement an in-app NFT marketplace in the future, aiming to further encourage efficient trading of their Gemstone NFTs which will play a core part in the development of Ruby Exchange.

Team
Ruby Exchange’s core team consists of 7 full-time crypto and DeFi veterans with vast experience within the cryptocurrency space, with members holding key roles and positions within both DeFi and CeFi projects in the form of Full Stack Devs, Marketing Directors, Content Creators, Portfolio Managers, BD Managers, Algorithmic Traders and Market Makers. This provides Ruby Exchange with the necessary resources to continue building out the main DEX and AMM of SKALE, with core members also having past experience within DEX Arbitrage.

$RUBY Token Metrics

• Total Token Supply: 200,000,000 RUBY
• Launchpad Sale Hard Cap: 550,000 USD (split into multiple pools)*
  - Standard pool: 250,000
  - Unlimited pool: 250,000
  - Whitelist allocation: 50,000
• Token Vesting: 100% distributed on day 1
• Listing Price: US$0.35

Risk Evaluation
One of Ruby Exchange’s main risk as a DEX and AMM would be smart contract risks, as Ruby Exchange will be interacting with a number of smart contracts, all of which impose some form of risk to Ruby Exchange’s users. This can be both known and unknown risks that could result in the failure or vulnerability of Ruby Exchange’s smart contracts which could result in assets being locked or lost forever. However, the team behind Ruby Exchange has been able to mitigate these risks by completing audits by SlowMist.

About Ruby.Exchange
Ruby.Exchange is the foremost AMM on SKALE V2, a zero-gas, high-throughput multichain solution for Ethereum. Ruby delivers a gamified user experience for traders and liquidity providers by integrating NFTs: Generative gemstones that embody financial and practical utility as well as artistic value.
Website | Twitter | Telegram | Blog

About Impossible Finance
Impossible Finance is a multi-chain incubator, launchpad, and swap platform led by Ex-Binance & DeFi veterans. It offers a robust product-first ecosystem that supports top-tier blockchain projects to targeted user audiences. With extensive support from key leaders in the crypto industry, Impossible Finance simplifies DeFi for users to enjoy fairer investing, cheaper trading and better yields.
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• Notes: DISCLAIMERS, TERMS, and RISKS
• Risk Warning: Trading and/or generally investing in any cryptocurrency involve significant risks and can result in the complete loss of your capital. You should not invest more than you can afford to lose and you should ensure that you fully understand the risks involved. Before investing, please consider your level of experience, objectives, and risk tolerance, and seek independent financial and legal advice if necessary. It is your responsibility to ascertain whether you are permitted to use the services of Impossible Finance based on the legal and regulatory requirements of your country of residence and/or applicable jurisdiction(s).