Swapr Beta AMA — A retrospective
Swapr AMA answers pressing questions preceding Swapr beta release
The first Swapr AMA was held on March 12th, 2021, in anticipation of the upcoming beta launch. Many topics were addressed including roadmaps, “eco-routing”, xDai compatibility, and much more!
AMA attendees received a shiny POAP, the first of its kind from DXdao!
The AMA panelists included:
Frederico — Swapr lead developer.
Zett — Swapr product lead and designer.
John K — DXdao ecosystem and product development.
Keenan L — DXdao communications, community, and marketing.
Without further ado, here are the Swapr Beta AMA questions (and answers)!
What is Swapr?
Hello. I have joined the community because I like OMEN but I know little-to-nothing about Swapr.
I see it is some kind of Uniswap (?), at least from the UI, but could you ELI5 it’s key features and why you think it is a good new product?
Answer:
You are right. Swapr is a Uniswap fork and it started off as the first AMM launched by a DAO. I think the easiest way to visualize how Swapr will be different is by looking at our roadmap. I can talk more specifically about each feature.
Swapr beta is our next launch where you will be able to see and test some of these new features listed in the roadmap.
— Zett
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Swapr Competition
How does it compete then with other forks running on L2’s such as Honeyswap? Why should I use Swapr on xDAI vs Honeyswap?
Answer:
I have created a chart to visualize which major difference other forks have with Swapr. Here one for Swapr v1 vs Honeyswap.
As you guys can see I’m big on visualizing things. I think these questions are great. When we plan each version we keep asking ourselves the same. What can we offer that others don’t?
— Zett
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Swapr Development
What are the main difficulties for developing Swapr?
Answer:
Right now most of the development effort is focused on liquidity mining. The main difficulty is related to how we are trying to build things. We’re trying to achieve DIY farming, where people can freely setup a liquidity mining campaign for any given Swapr pair directly from the dapp, permissionlessly.
Since the concept is rather new, we’re focusing very much on making sure that the whole experience is smooth and safe for both the stakers and the farming campaign creators. Main effort is currently on the dapp, but the smart contracts are also a big focus, with audits coming soon.
— Frederico
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Swapr LP Incentives
Hey! Great to see competition blooming. It’s obvious that liquidity for AMM exchange is paramount. How do you plan to convince LP to provide on Swapr?
Answer:
We are giving the power to decide the fees to the LPs. We believe the LPs know the best on what fees they should ask for. We will also plan to have incentive programs to move over liquidity where we reward LPs. Depending on how OMN token goes… we might see SWPR token…
— Zett
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Swapr Conditional Farming
“Conditional Farming” sounds cool, what is that? Related to OMEN?
Answer:
Yes it is related to Omen in that it will be enabled by the same “Conditional Tokens” platform that Omen is built on. Maybe the easiest way to explain this is with an example.
Imagine there is a goal of reaching $1M of liquidity on a Swapr pool. A prediction market can be set up with the question “Will X Pool have above $1M in liquidity for Y date range?” DXdao funds this market, minting itself an equal amount of “YES” and “NO” outcome tokens. DXdao holds onto the “NO” tokens but provides the “YES” tokens as rewards to LP providers in X pool in a farming campaign. The LP farmers earn the “YES” token, and if the goal is reached, the “YES” token is worth something. If the goal isn’t reached, then the “YES” token is worthless, and DXdao reclaims it’s funds from the prediction market by redeeming the “NO” tokens.
— John K
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Swapr as a Multichain AMM
Also, I saw Andre working on multichain AMM. I see Swapr is planned to be multi too. Can you describe the process of adding liquidity from LP point of view?
Answer:
From the UI/UX perspective we want the transition to be smooth and always trying to create something that does not need a manual to use. I’m going to share a prototype on how the network switcher will work to get an idea of how simple we plan to do this. The same way you add liquidity on main-net. I don’t see a reason why it should be different. We plan to build a bridge and partner up with other projects to help us build this multichain machine.
— Zett
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Swapr Eco-Routing
I suspect “Routing” stands for the ability to leech (or use?) liquidity of other protocols, such as Uniswap? Can you say something about that?
Answer:
You are indeed correct, routing in Swapr is a bit different though. In our quest to be as user friendly as possible, our “eco-routing” gives you the exact same price you can find on the most popular (and liquid) AMMs on the market, without any additional fees.
Technically speaking, when you’re using Swapr and are about to perform a trade, we’re always checking for the best price on the market, and even if we find it on a competitor’s platform, the swap is performed at that true price, by making sure to interact directly with the targeted platform (which on mainnet can for example be Uniswap or Sushiswap).
There are no intermediate steps, the Swapr dapp gives you a great all-in-one experience to look for the best price and swap with the best price too.
— Frederico
Is it correct to say that Swapr is therefore some kind of AMM + “AMM aggregator”?
Answer:
Yes, I think that’s a nice way of saying it. And to make it super clear, we actually don’t charge any fee or additional hidden cost for it!
— Frederico
Zett adds:
This will come extra handy when we see multiple L2 uniswap forks popup and you have to check 3–4 AMMs to get the best price. Our eco-router will do this and don’t take any extra for the effort.
— Zett
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Swapr <> Brave Partnership?
Has DXdao tried to contact/talk with Brave? Brave is in the process of building a multichain AMM + AMM Aggregator. A partnership based on Swapr would be huge for DXdao.
Answer:
To the best of my knowledge, there has not been prior contact between our organizations. I agree that this would be big — I am going to make a note for discussion at our weekly BizDev call!
— Keenan L
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Swapr Protocol Fee
Does DXdao get revenue from trading fees and how much?
Answer:
Yes.
The default protocol fee for any Swapr pair (mainnet or xDai) is 10% of the swap fee. By default the swap fee is .25%, so that means a protocol fee of .025%. The protocol fee will always be relative to the swap fee, and the swap fee can be governed by the LPs for each pool. DXdao can adjust the protocol fee percentage. I will add another answer expanding on how this revenue is directed to DXD holders from a technical perspective.
The current token model for DXD is a mint and burn. There is a buyback reserve in the bonding curve which supports the sell/burn price for DXD. The goal under this model is to direct profits to this buyback reserve. Profits for Swapr (as in Uniswap) are in the form of LP tokens. Since the buyback reserve only accepts ETH, this raises the technical challenge of converting the LP tokens into ETH.
There is a smart contract dedicated to this purpose which collects the LP fees and then attempts to convert them into ETH and send the ETH to the bonding curve. If they cannot be converted into ETH, the tokens that this fee collector ends up with are instead sent to DXdao’s treasury. This gets even trickier on other chains since the bonding curve (or ETH itself) don’t exist on these chains. For now on xDAI, the profits are being sent to DXdao’s xDai base.
— John K
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DXdao Supplied Swapr Liquidity
When DXdao liquidity in swapr?
Answer:
There are active proposals on xDAI and mainnet for depositing liquidity on Swapr. So if all goes well, next week will be the first treasury liquidity on Swapr on xDAI and mainnet next week!
The initial target pools are WETH-DAI and xWETH-wXDAI
— John K
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Swapr on xDai
Why xDai?
Answer:
DXdao’s relationship with the xDai chain started because Gnosis took the initiative to deploy the conditional token framework on xDai which opened up the doors for Omen to go to xDai. Omen is now live on xDai and shortly Swapr as well! There is also DXdao governance there, also known as DXdao’s “xDai Base” or “xDXdao.”
As far as I know Gnosis took an interest in xDai because it was one of the earliest scalability solutions that had support for the tech stack that is needed/used on Ethereum main chain. As far as I know, DXdao will continue to grow on xDai but there is also an interested in expanding to other scalability solution, in particular Ethereum L2s. Swapr is already live on the Arbitrum testnet. And we are keeping a close eye on Arbitrum, Optimism, and also ZK rollup solutions.
— John K
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Thank you to the community for the great batch of questions! Stay tuned, Swapr Beta is poised to launch this month: April 2021!
About Swapr: Swapr is a multi-chain automated market maker (AMM), deployed on Ethereum mainnet, xDai, and soon Arbitrum. Swapr is the first AMM to allow for adjustable swap fees through governance, as well as the first DAO deployed DeFi protocol on Ethereum; developed organically within the DXdao community.
Connect with Swapr: Discord, Twitter, Telegram
Connect with DXdao: Discord, Twitter, Telegram, Keybase, DAOtalk Forum
