DXdao announces Swapr, becoming the first DAO to launch a DeFi Protocol on Ethereum
Swapr is a governance-enabled decentralized exchange, based on a fork of Uniswap
- Swapr is the first AMM to allow for adjustable fees for liquidity pools through governance
- DXdao will be the first DAO to use its treasury to seed a new DeFi protocol
- Conditional farming is a novel way to incentivize Swapr LPs based on a future liquidity threshold
- Swapr dApp and core contracts must be ratified by DXdao REP holders through several governance proposals
The DXdao community is proud to announce the alpha launch of Swapr on Ethereum mainnet. Swapr is the first automated market maker (AMM) to allow for adjustable swap fees through governance and has been organically developed within the DXdao community (code name: DXswap). The contracts have been audited by Sunfish Technology.
The community is moving forward with a set of proposals to ratify formal governance of the core contracts and Swapr.eth under DXdao, or more specifically, DXdao REP holders.
Swapr is DXdao’s first foray into the DeFi liquidity wars and also demonstrates the capabilities of DXdao’s decentralized governance process; it intends to focus on specific trade pairs to drive volume and fees.
Swapr (alpha) will launch on Ethereum mainnet with a limited number of features, but DXdao governance is working on a slew of features to be rolled out in the coming months — assuming, of course, they are approved by DXdao REP holders.
The Road Ahead:
- Launch Proposal Process — over the next two weeks, two separate proposals must go through DXdao governance to launch Swapr (alpha), one that authorizes the deployer and core contracts and another that resolves the Swapr.ETH ENS domain to the dApp’s IPFS hash.
UPDATE 27/11: The deployer contract has been deployed on main net! There is a proposal in the queue to fund it. Check its progress here. Next, another proposal will be submitted to resolve the dApp’s IPFS hash to Swapr.ETH
- DXdao-supplied liquidity — the community intends to use part of the treasury to provide liquidity on Swapr. This diversifies the treasury and supports Swapr. The multi-day proposal process to move funds out of the treasury presents challenges, because it’s impossible to predict the future price. To address this, DXdao developed a relayer to receive funds at execution, find the price/ratio for the token pair and deposit liquidity on Swapr. Estimated time til DXdao-supplied liquidity: Late December-early Q1 2021
- Conditional Farming Rewards — DXdao is pioneering a new liquidity mining program that uses Omen’s prediction markets to incentivize Swapr LPs to maintain liquidity thresholds. On Swapr Beta, LPs in incentivized pools will be issued “Yes” shares on an Omen market that the pool will continuously be above a certain amount. The LP is thereby incentivized to keep their liquidity in Swapr, thereby increasing the value of their “Yes” shares. Farming rewards are conditional on meeting a liquidity threshold. Estimated time of Conditional Farming Rewards: Late December-early Q1 2021
- Uniswap/Sushiswap pool aggregation — Swapr (Alpha) only routes orders through Swapr liquidity pools, but the community is currently working on a new router that would also route through Uniswap/Sushiswap pools if they had a better price. This means that traders on Swapr will get the guaranteed best price execution, even if that’s through a Uniswap/Sushiswap liquidity pool. Estimated time of pool aggregation: Q1 2021
- LP Guild Governance — Swapr (Alpha) fees can be adjusted through governance. On Swapr (Alpha), fees can be adjusted through DXdao proposals, but on Swapr V1.0, LPs will be able to vote themselves on whether to raise or lower the fee, using the LP tokens to create a “LP Guild”. This will be a huge step forward for liquidity providers and truly allow users to govern their liquidity. Estimated time of LP Guilds Governance: Q1 2021
The next few weeks and months will be an experimentation in consensus formation and decentralized governance as the community moves from Swapr alpha, to Swapr beta and ultimately Swapr V1.0. The community will need to discuss how to use funds from the treasury, what pools to incentivize and general Swapr strategy. This governance process is not the fastest, but it means that when the DXdao community moves into a new direction, it moves together.
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About DXdao: DXdao is a decentralized collective that builds and governs DeFi products. DXdao was spawned in May 2019 through a collaboration between Gnosis and DAOstack. Reputation (REP) is voting power in DXdao, and DXD is the financial token with a claim on revenue from DXdao products. DXdao products include Omen (prediction markets), Mesa (batch auction DEX), Swapr (governance-enabled AMM) and Rails (L2 payment app). DXdao believes in governance and decentralization.