Introducing Swap Inc.
AMM with Incorporated pools + Liquidity utilization + VE tokenomics
Swap Inc.
Swap Inc. is a next generation AMM built to benefit both liquidity providers and traders. The fact that it’s being built on zkSync adds to its attractiveness because of the extremely low fees and high security of the rollup. Swap Inc. will be one of the most innovative dApps built on zkSync.
Why? Let’s talk about it.
By providing liquidity to AMMs people stand to receive trading fees and/or protocol governance in the form of token emissions. This return on investment (ROI), most commonly called APR, is the reason people provide liquidity to protocols such as Curve, Sushiswap, and Uniswap.
So, what will separate Swap Inc. from the other established AMMs?
Swap Inc. will allow for incorporated pools with custom fee structures, thus creating a competitive ecosystem that favors low trading fees and high yields. Swap Inc. will also help incorporated pool operators to setup their own yield strategy for liquidity providers so they can easily utilize the highest APR pools.
Unlike other AMMs the liquidity you provide to Swap Inc. will automatically be put to work earning yield in external DeFi protocols by pool operators. Since there can be multiple pools for one token pair, pool operators will incentivize liquidity in their pool by providing the highest yield. This will generate high competition for operators because no traders will want to trade if there is low liquidity. However, stiff competition ensures high enough yields to tempt in large liquidity providers which, in turn, guarantees low slippage on the pools for traders. In order to provide the highest APR pool operators will perform various actions such as liquidity utilization and incentivized token rewards in TOKEN. Token rewards per pool will be voted for using veTOKEN, in the same manner that curve currently operates.
Tokenomics
Swap Inc.’s native token will be called TOKEN and new TOKEN will minted according to the minting schedule to be distributed for all the pools according to their reward allocation point decided by veTOKEN holders. (Or, if you were a member of LevX DAO, you can get TOKEN by providing your LEVX-WETH LP token to the protocol. (LEVX will remain as the levx.io native token, however, the supply will be decreased from 33,333 by whatever amount gets transformed into TOKEN.)
Unlike most other yield tokens TOKEN will be deflationary practically. Holders of TOKEN will be able to stake their tokens in exchange for veTOKEN — which will provide them with protocol revenue and the ability to vote for which pools have the highest token emissions weekly. TOKEN will be minted every 72 hours, but the emission will always be less than the total staked amount (veTOKEN), therefore, the total circulating amount of TOKEN in the market will always be decreasing. To add to the deflationary tokenomics 50% of TOKEN will be burnt if you want to stake out veTOKEN as a penalty.
Supported by DAOKit
Swap Inc. will be integrated with DAOKit, which is a tool being built by LevX for DAO management, payments, and fundraising. By utilizing DAOKit’s fundraising and treasury management tools, Swap Inc. will make it very easy for new projects to raise funds, as well as instantly give investors a high yield pool to allocate their tokens. DAOKit will also provide an easy and transparent way to give contributors of Swap Inc. fair compensation (which can be voted for using veTOKEN).
Conclusion
Swap Inc.solves many problems in DeFi. Firstly, it creates a more flexible swapping protocol with various incorporated pools that will benefit different market participants, including liquidity providers, traders, and even other DAOs. Secondly, the tokenomics are deflationary and value flows to participants who are aligned long-term with the protocol. Finally, Swap Inc. is being built on the best scaling solution in DeFi (zkSync) which is predicted to explode with users and TVL in the coming years.
Need I say more?
That’s probably enough for now… Launch slated for this Summer so stay tuned and join LevX DAO for the latest updates.
