Mercurity Swap Protocol

Published in

MercurityFinance

5 min readOct 31, 2020

Problem Overview

Balancer has evolved significantly based on Uniswap and has become like a protocol like MEE. So far in the DeFi swap world, Balancer has been particularly successful in improving flexibility on adding more assets into the liquidity pool, as well as optimizing automated market maker (AMM) algorithms.

However, Balancer has not achieved complete community autonomy, and the market needs an ‘more autonomous Balancer’. In addition, Balancer does not have a design for liquidity pool management or community autonomy, which also greatly constrains the power of the community.

Mercurity Swap, inspired by Balancer, makes key enhancements to Balancer, adding many features, particularly in liquidity pool autonomy and community governance, etc. We believe it will help improve the design of the protocol and bring more benefits to the participants involved.

Protocol Design

Autonomous Governance of Liquidity Pools

Balancer liquidity pools distribute transaction fees based on liquidity providers’ actual contributions. However, Balancer overlooked liquidity pool creators, early-stage liquidity contributors, and non-financing community contributors who are not liquidity providers, such as community managers, marketers, and other industry influencers (aka key opinion leaders, or KOLs). Balancer’s model is like a fund with no General Partner, lacking incentives for non-financing contributors and not conducive to using community resources.

In our approach, liquidity pool contributors are classified as either an Owner or an LP (Liquidity Provider).

Owners create and manage liquidity pools.
There are also non-founder Owners, such as KOL.
Owners can be individuals or a team.

Evolve Liquidity Pools to Funds

Each liquidity pool on Balancer only has an LP without the Owner. Balancer independently determines transaction fees and directly shares revenue to the LP, making Balancer more like a fund in which Balancer itself is the owner.

In contrast, Mercurity Swap enables community autonomy for each liquidity pool. Each pool is like an independent fund, and Mercurity Swap becomes the infrastructure for MEE funds, helping to build an ecosystem that allows everyone to create and operate an MEE fund.

Trade Mining

While traders on decentralized exchanges (DEXs) bear higher gas fees and potentially larger price slippages than on centralized exchanges (CEXs), platforms like Uniswap do not compensate traders. Mercurity Swap considers traders to be a community as important as liquidity providers, and incentivizes traders so that they are mining when they trade.

Pair Token

On Mercurity Swap, Pair Token is the credential for governance for individual liquidity pools. In each liquidity pool, liquidity providers create a sub-community, increasing autonomy for future upgrades, development, and maintenance of the liquidity pool. Pair Token is an ERC-20 token that can be freely transferred and traded.

1. Rules:

Total number available: 100 million per liquidity pool.
Name: “trading pair + X” e.g. ETHUSDTX.
Distribution ratio:

Pair Token is 100% distributed to LP token holders for community governance, incentives, etc.

Governance Token MEE

MEE is the platform token of Mercurity Swap with no governance rights on transaction fees, dividends, etc.

Total volume: 50 million

Distribution: no pre-mining, released in 5–6 years, 84.9% mining, 0.1% airdrop, and the rest 10% is released to the project developer in the same proportion as the mining progress.

Liquidity mining: 44.5%.
Trade mining: 44.5%
Pledge mining: 0.5%
Community incentive: 0.5%
Project developer: 10%

Liquidity Sub-communities

Pair Tokens represent the governance rights for each liquidity pool. Along with the Mercurity Swap protocol, Pair Tokens empower liquidity pools to become completely autonomous communities.

Community Autonomy

The community votes to determine which liquidity pool adopts multiple mining rewards. Single rewards are the default and do not require any vote. Liquidity pool sub-communities will independently determine the trading fee rates for their liquidity pool and whether the liquidity pool requires some level of permission to join, such as a minimum amount of liquidity.

Token Certification (optional)

Balancer is fully decentralized but also full of fraudulent tokens. Users are struggling to distinguish fraudulent tokens from legitimate ones. On Mercurity Swap, we provide an optional token certification service to help solve this problem.

Sustainability

To ensure the long-term viability and sustainability of the project, 10% of the MEE is reserved by the community to fund development and future upgrades. The fund may be used for future functional upgrades and front-end development to facilitate users’ access to the protocol.

LP Token Staking

With LP token staking in Mercurity Swap, users can farm Mercurity Swap token MEE and PairToken. LP can get MEE.

Liquidity Migration

When Balancer LP Token Staking farming ends, we will migrate all LP tokens staked on the Mercurity Swap protocol. The migration will redeem all LP tokens from Balancer and initiate new liquidity pools. These new pools will be nearly identical to the Balancer pools with added features. Any fee generated in the liquidity pool will be shared with MEE token holders.

When the migration is complete, the converted liquidity will be injected into Mercurity Swap liquidity pools. The liquidity providers do not need to operate in migration but earn Pair Token and MEE tokens through providing future liquidity.

Use of Protocol

From the perspective of a protocol and smart contract, Mercurity Swap shares the same API with Balancer. This means that if your protocol is currently compatible with Balancer, it can be integrated with Mercurity Swap. We also adopt the familiar Balancer user interface and front end to make the conversion as unobtrusive as possible for protocol users.

Security Audit

All smart contracts have been audited by the developer community and are publicly available on GitHub for all participants to review here: (Available when audit is completed)

Smart Contract

MEE token contract code: (Available after deployment)

The Mercurity Swap smart contract is the only minter of the MEE token.

Mercurity Swap routing contract code：(Available after deployment)

Mercurity Swap contract core code：(Available after deployment)

Mercurity Swap reward claim contract code：(Available after deployment)

Mercurity Swap deploys contracts on following addresses on Ethereum mainnet: (Available after deployment)

Factory：(Available after deployment)

Router：(Available after deployment)

Redeem：(Available after deployment)

MEE：(Available after deployment)

How to participate?