In this article, we present the first iteration of OG Swaps and review the underlying “relay token” mechanics, emphasizing its place in the multichain ecosystem of Graviton.
Introduction
OG Swaps is a platform that allows for swapping native tokens between blockchains using so-called relay token mechanics implemented with GTON as a “token-in-the-middle”. The principle of relaying transactions through a single token was first introduced by Bancor several years ago but wasn’t fully accepted by the market at that point and ultimately ended up abandoned.
Now, following the drastic expansion of the DeFi industry, liquidity provision is becoming more and more suitable for helping the idea of the relay token fulfil its original purpose.
As a project, OG Swaps is established to complement the Graviton multichain ecosystem by evolving into a product that helps users to adopt new blockchains and DeFi services and therefore expand their trading and liquidity mining opportunities.
Understanding OG Swaps
The idea behind OG Swaps is simple — to allow for swapping of native assets between chains through a faster, simpler, and cheaper system of liquidity buffers in comparison with traditional bridge solutions which provide a limited choice of tokens and origin/destination blockchains.
There are two popular cross-chain DEX projects: ThorChain and Anyswap. Their implementation is based on bridges and token lock/unlock procedures, while OG Swaps draws inspiration from a different concept, namely that of Cross-chain Relay Tokens, which will be explained further.
OG Swaps leverages the GTON token used for governance in Graviton and its wide multichain presence. As a relay token, GTON is used as a proxy when converting between native tokens of different blockchains without the need to involve bridges.
Problem
Most DeFi users have an account on the Ethereum network with some amount of Ethereum on it. Imagine a situation when such a user discovers the Fantom network and becomes interested in trying what it has to offer. Despite the fact that Fantom is an EVM chain, which means that the user can simply utilize their existing account via Metamask for signing transactions and connect to the Fantom network in one click, one problem remains: while their Fantom balance has no FTM tokens, the user is unable to make transactions.
In theory, FTM could just be bought on a centralized exchange (CEX) and brought to the native chain, but this process is complicated and not every exchange actually supports this functionality.
The problem of over-complicated user experience is very pressing in the field of DeFi cross-chain and one of the most frequently mentioned problems in our poll.
In addition, when a user has funds on Ethereum and is curious to explore a non-EVM blockchain (e.g. Solana, Tron, Cardano, Polkadot, Cosmos), the problem of user experience becomes even more pronounced.
OG Swaps is committed to solving this issue by providing a stepping stone for users to enter any new blockchain. Our mission is to erase the boundaries between the ecosystems, make the DeFi truly cross-chain and borderless and lower the threshold for new-to-crypto users.
As an example, the rest of this article describes buying the native token in Solana, a destination blockchain, by spending the native token of the original blockchain network.
Relay Token
GTON as an AMM relay token allows one to trade assets with minimal slippage, because of the constantly available liquidity in the pools with GTON stimulated by the LP reward systems of Graviton. Why does OG Swaps uses GTON by Graviton as a relay token? It’s pretty simple — the LP-focused design of Graviton makes it an ideal playground for such functionality in general and mechanics in particular.
On each of the integrated blockchains, the GTON token has AMM DEX pools for their native tokens. For providing liquidity to the GTON token in these pools, a reward is paid out (see LP farming). For example, on the Ethereum blockchain, there is a GTON pool to ETH (on Uniswap), on the Solana blockchain, there is a pool to SOL (on Serum), and on Polygon and Fantom, respectively, to Matic and FTM.
When a user from the Ethereum network makes a deposit converting ETH on Ethereum into SOL on Solana, a few operations take place:
- ETH is sold for GTON on an AMM pool in the Ethereum network.
- GTON is immediately locked on a smart contract of the Graviton system (a so-called mirror account).
- The oracles notice this event and signal it to smart contracts on Solana. There, in turn, an equivalent amount of GTON is unlocked and sold for SOL in an AMM pool on the Solana blockchain.
- The purchased native tokens of the Solana blockchain are transferred to the user’s account.
It is important to note that price oracles are not required in such a system, since the rate is determined automatically when buying and selling GTON in AMM pools on the corresponding chains. However, OG Swaps still needs reliable oracles that will read events from one blockchain and signal them to another, such as, for example, Band Protocol or Chainlink.
This protocol can be applied to swaps between EVM and non-EVM (Ethereum <-> Solana) networks supported by Graviton, and between EVM and EVM (bsc <-> polygon) and even non-EVM and non-EVM (Solana <-> Waves / Tron) blockchains.
Thus, the GTON token plays an important role as a Relay Token for the cross-chain DeFi by allowing users to convert native tokens into different chains.
OG Product
The proposed system that implements cross-chain swaps without any direct swap transactions can be monetized via the relay token (GTON) itself. For example, a minor fee of around 0.01 GTON plus 0.01% of the transaction amount can be subtracted from every transaction with GTON. The accrued fees will then be sent to the governance stakers of GTON.
The key feature here that should be emphasized is that users are not required to purchase GTON, interact with Graviton, or research how the transactions between blockchains are being transmitted. All they need is to connect the Metamask account to the OG Swaps UI or the wallet of any other non-EVM chains integrated in the future.
However, the efficiency of OG Swaps is closely connected to the Graviton system and tied with the growth of liquidity in the pools with GTON across different blockchains. The farming incentives that Graviton stimulates the growth of the pools’ value, which, in turn, ensures the speed of the OG Swaps and the minimum slippage.
That’s why OG Swaps, initially envisioned as a part of the Graviton product, becomes an independent DeFi platform while still supplementing what Graviton has to offer.
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