What Lies Ahead: AMA with Swapz CTO
Answering questions submitted by the Swapz community
If good things come to those who wait, then no one has more reasons to be excited than the Swapz community, better known as the Zero-Slippage Cross-Chain Gang.
A week ago we asked you to submit your questions for our CTO to answer. In between long bouts of hardcore devving, the Swapz CTO found the time to give each thoughtful question the attention it deserves.
Naturally, that ruled out all moonboy “wen lambo” price predictions style questions. After all, development work is about building, and not trying to predict how the world’s most volatile market will behave in the future.
If you’re interested in how the Swapz DEX will work, then you’ll certainly find what you look for in this article.
Let’s dig into it, shall we?
What Lies Ahead: AMA with Swapz CTO
1) If the Swapz DEX is zero-slippage, how does the team get paid?
There’s a fundamental misunderstanding of slippage in this question. Although slippage is a cost that comes out of traders’ wallets, it isn’t a fee that goes towards the DEX and/or Liquidity provider. Bots manipulated by highly skilled traders are the ones who profit from slippage.
In Swapz, zero-slippage limit order swaps will require a transaction fee to be paid in SWAPZ, as this fee will be hard coded into the smart contract. If there isn’t a way to make this trade happen at a p2p level, our DEX will execute the order behind the scenes on the PancakeSwap infrastructure, where a 0.03% fee will be paid to liquidity providers.
For cross-chain trades, Swapz will rely on cross-chain Liquidity Pools where the providers will similarly get a 0.03% fee for their services. We haven’t decided yet but there’s a chance we’ll charge an additional fee to cover transaction costs across chains which we’ll then distribute to Swapz stakers. Likewise, we’re considering making this available “free of charge” to traders who stake a certain number of SWAPZ tokens. But at the moment these are just ideas on a board. When it’s time to make a decision, we’ll ask the community for their input on the best course of action.
2) How long till we can see the DEX, or a demo?
Development is progressing at a strong pace. As stated in the roadmap, we’re confident we’ll launch the Swapz DEX in its Minimum Viable Product (MVP) format by the end of Q3 2021. This MVP will be a cross-chain stablecoin swap of USDT for different EVM chains. After that is launched successfully and securely, we’ll get to work on adding zero-slippage to our DEX along with expanding the scope of tradable assets on our platform.
3) Are you prepared for the Bear Market to come? How do you ensure the project will survive?
We do not spend much, and the project has been sufficiently budgeted from day one. We don’t hire highly expensive devs who are solely focused on fast income and the short term. All assets set aside for development are in USD, so we could continue and develop without any income in the most extreme circumstances. We don’t foresee this being an issue, and even if it were, we’re building for the long-term.
4) Are “chain agnostic” and “cross-chain” the same thing?
No. “Chain agnostic” is a quality of Swapz. It only means we can work with any blockchain that is Ethereum Virtual Machine (EVM) compatible. “Cross-chain” is an adjective that describes the execution of a transaction between different chains.
5) Bitboy mentioned that Swapz will benefit greatly once Cardano mainnet is launched, in what way, and specifically with Cardano’s mainnet?
We don’t know why he phrased it in those terms. We may add support for Cardano with cross-chain swapping at a later date, but as it stands we’re focused on launching our Minimum Viable Product DEX as a cross-chain stablecoin swap first. Once we’ve done that, we’ll progressively add the zero-slippage functionality and expand the capabilities of our DEX to include the most traded cryptoassets in the industry.
6) Will LPs be needed and if so what for if it’s P2P?
This is an excellent question. Swapz will rely on Liquidity Pools for cross-chain transactions, but won’t need them for the zero-slippage p2p transactions where users will trade directly with each other. For the p2p trades, users will only need to approve smart contracts to transfer their tokens, paying an execution fee in SWAPZ for the mesh network which will then be distributed to stakers.
7) Will there be any exclusive deals with projects to launch coins on Swapz instead of Pancake for example or will it be just a matter of them deciding to create a pool on Swapz and that’s it?
At the moment, we’re not planning to become a DEX where new projects launch since our initial focus will be on becoming a place where highly liquid assets can be traded across chains and with zero slippage.
8) There were talks about adding some games on the platform for the community, will there be NFTs as well at some point in the future?
There’s no denying the NFT area is an extremely interesting sector in the crypto industry which has recently experienced an incredible boom. We have members of our team actively researching potential NFT partnerships for the Swapz platform. That said, at the moment our development team is focused exclusively on building the DEX so potentially adding NFTs to the Swapz universe is more of a long-term consideration instead of a short-term concern.
9) For how long have you been thinking about solving the slippage problem and has anyone tried to solve it to your knowledge?
It’s been on my mind since the dawn of decentralised exchanges. Slippage is a well-known problem that only a small few teams like 1inch have attempted to solve. We can assess their success with the fact that slippage is still costing traders on decentralised exchanges millions of dollars a day. We’re going further than competitors have gone by purposely building zero-slippage into the foundations of our platform from the beginning — instead of after the exchange is already working as a traditional AMM. This ambitious goal naturally means it’ll take us longer to build a secure platform that can deliver it, but we’re confident we’ll be the DEX that’ll crack the slippage problem.
10) What main features will be on the platform eventually?
Currently we are developing our two core features:
- A Cross-chain swap of stablecoins between EVM chains (our MVP).
- A Zero-slippage swap.
We have plenty more under development and research, but these will be the backbone of Swapz. Our roadmap will be updated accordingly if and when we broaden our development to include other features.
11) Will there be a need for staking to run a mesh node and if so how many tokens roughly will be needed for that?
This incentive model is still under development. We’ll share more news about this in the future, but rest assured we are always looking for ways to incentivize participation and loyal support within our ecosystem, as is the industry standard.
12) Will Swapz be compatible with Solana for example and will other future smart contacts be able to cross chain with Swapz?
We are going to add Solana support in our cross-chain swap, yes! We’re planning to bring cross-chain zero-slippage swaps to all EVM compatible chains.
13) After the MVP is launched, will Swapz try to get listed on exchanges such as Binance and Coinbase?
Good things come to those that wait, we’ll always aspire for the highest rungs of the ladder but are realistic in our immediate expectations. We are speaking with a few exchanges and have had some interesting discussions. Given the disruptive potential of the DEX we’re building, with a strong community and upward momentum, anything is possible.
14) Do you really feel as the CTO we have to go open source? Technically speaking isn’t this your baby?
The project will be partially open sourced. The mesh node will be closed source, as this is proprietary and fundamental to the security of the platform. The most recent hacks of ThorChain and Poly Network have shown the cost of sacrificing security to rushed development of new features, so every technical decision we make will always prioritise the security of our users’ funds — which will indeed be safu on Swapz.
15) Given DeFi is the hottest thing to hack at the moment, other than ensuring there are no vulnerabilities, what technology does Swapz have to minimise a breach that others don’t?
Our technology is our strategy. We spent a lot of time learning about each hack and exploit as they occur. The main problem of those projects is that they are trying to build a lot of functionality and go mainstream too rapidly, due to immense demand and constraints against them. Naturally, this means they don’t test their solutions to a sufficiently high standard to be confident that they’re safe. Or if they did, they failed. In their defence, even auditors weren’t able to spot the vulnerabilities of the solutions they were auditing.
Swapz, on the other hand, is building everything with simplicity, security, and ease-of-use in mind. We won’t try to compete for “most features added” and we won’t rush development just to say we were the first ones to do something. Instead, we will focus on building the key features we have promised to deliver: zero-slippage transactions and cross-chain swaps. It’s important to remember that real decentralization goes slower than marketing and we have the resources, space and freedom to develop with security in mind. That is our plan: ruthless and relentless testing of every feature, always taking one on at a time to make sure it’s bullet-proof before we move onto the next one.
16) As anonymity is important to the Team, is migration to Tor Network on the cards if Regulation becomes a hindrance?
Tor is actually regulated and easily monitored by centralized organizations, governments, and more. Check Google and you’ll see a whole host of Tor horror stories!
17) Will it be possible down the road to store assets on Swapz — just like we do on centralized exchanges?
This won’t be possible as Swapz will be a decentralised exchange.
18) Can Swapz if possible accommodate tokens that have a tax taken to return to holders ie. 5% returned to holders 3% to burn wallet 2% to marketing wallet, etc? Was this attempted and if it wasn’t possible what was the technical reason?
The short answer is no because these tokens only constitute a small part of the market. We are building a zero-slippage DEX so it wouldn’t make sense to try to accommodate tokens that rely on high slippage, especially because these are often highly illiquid assets that are sparsely traded. Our focus is exclusively on highly traded and highly liquid assets. The SafeBabyMoonPuppyShibas of the world can wait.
19) Is Swapz aiming for the untraceable element of the transactions, or more-so the focus on Privacy of the User base or both?
Privacy is a foundational core principle of the whole Swapz ecosystem. We are building a platform where our users’ privacy will always be safeguarded following the traditional approach to these matters in DeFi. At the moment, we are focused exclusively on launching our DEX in its MVP format of a cross-chain stablecoin swap. Once that it’s in place and we’ve added the zero-slippage capability and widened the base of tradable tokens, we can start looking into other interesting features like anonymising transactions with ZK snarks. When we get to the point where we have the availability to work on new features, we’ll reach out to the Swapz community to decide on a course of action.
Thank you for submitting your questions. We hope you found this AMA to be a clarifying and useful exercise.
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