OpenSwap AMA Recap
Last week we had the pleasure to host the founder of OpenSwap, Bruce Chau, for a quick AMA through Teddy’s Telegram channel. This was similar to the AMA hosted through Snowball not too long ago, a recap of which can be found here.
The following are the questions and answers that took place during the event, including many questions from the community near the end. Read all about them below:
Tell us more about OpenSwap; what was one of the main objectives in starting the protocol?
Bruce: As the DeFi universe continues to expand, onchain liquidity becomes increasingly scattered and less efficient across multiple chains and the situation is poised to get increasingly worse as new chains emerge with individual DEXs on each chain. The main objective of OpenSwap is to solve these challenges.
We at OpenSwap position ourselves as every crypto project’s BFF by providing a set of core tech to empower teams to establish sustained token health and attract liquidity from different chains. We hope our technologies can enable token projects to focus on what they do best- BUIDL! Our core technologies are:
OpenSwap Bridge, a single-asset cross chain bridge that offers more efficient cross chain swapping of chain-native digital assets through the use of our single-asset vaults in a decentralized manner.
Hybrid Smart Router, a set of smart contracts that identify potential swap paths leveraging both AMM pools and our liquidity queues, helping swappers identify the most cost- efficient routing based on the availability of liquidity queues and AMM pools.
Liquidity Queue, an alternative method to the traditional AMM mechanism that can provide users the ability to make on-chain swaps at 0 slippage. The tech can also be used for a variety of DeFi purposes such as conducting on-chain private sales, offering on-chain guaranteed token buyback, token flash sales and much more.
How does OpenSwap differentiate itself from the other bridges currently available?
Bruce: In the current cross chain environment, the most typical approaches that are being utilized are:
Lock and Mint Synthetics - A method used by the likes of Binance Bridge and MultiChain (Anyswap), where native tokens are given to a centralized custodian who in turn mints a synthetic version of the token on a target blockchain. The decentralized version requires usage of decentralized custodians that are properly incentivized to behave appropriately. Majority of cross chain bridges are of the Lock and Mint variety, the difference mostly lies on how true decentralization is actually achieved, and also the bridge operators’ approach on key security.
Cross Chain Liquidity Pair Pool - The method experimented and led by Thorchain, where liquidity providers stake pairs consisting of a native token with Thorchain’s RUNE token in vaults that forms pools, abd Thorchain routes swap leveraging the common RUNE token to facilitate cross chain swaps. With this approach, swappers are able to receive native tokens on target chain instead of synthetics.
Unlike the bridge types listed above, OpenSwap Bridge is introduced as a solution that offers more efficient cross chain swapping of chain-native assets through the usage of single asset vaults and a basket of decentralized mechanisms. With the incorporation of other OpenSwap technologies like liquidity queue and hybrid smart router, Open Interchain Protocol will form a fully transparent and capital-efficient end-to-end cross chain swapping solution.
With our latest addition of Any-to-Any cross chain swap, it is one of the most user friendly bridges out there. Normally a cross chain swap requires the same asset or specific pairs. This can be problematic if the native token like BNB or AVAX does not exist on the source chain. Without these tokens users cannot pay gas. They might need to rely on centralized exchanges for bridging which is not ideal for decentralization.
Could you expand a bit on your tokenomics and the utility of the OSWAP token?
Bruce: OSWAP token is the governance token of the OpenSwap ecosystem. The core purposes of the tokens are to incentivize usage of the OpenSwap platform, encourage users to get involved in governance, and enable a wide variety of platform privileges surrounding our core technologies and offerings.
Specific to the OpenSwap Bridge, upon mainnet release, users who wish to utilize OpenSwap Bridge as their cross chain solution will need OSWAP token as transaction fees for their cross chain activities. Furthermore, for people who are holding Bridge Troll NFTs, if they wish to become node validators for the OpenSwap bridge, they would need to stake OSWAP tokens as bond.
There are also many reasons to hold OSWAP surrounding other OpenSwap core offerings such as setting up the different types of liquidity queues for different purposes, as well as for users who want to participate in OpenSwap NFT loyalty program, they would need OSWAP for staking.
OpenSwap has designed its tokenomics to support a sustainable long-term project ensuring that 95% of all tokens will be subjected to locking and gradual vesting schedules, over 70% of all tokens will be subjected to vesting schedules of over 24 months as well as the fact that core team allocations and related tokens are subjected to a long-term vesting period to ensure community member confidence.
What steps have you taken to enhance the security of your protocol?
Bruce: OpenSwap established trust with the community through 3rd party audited smart contracts and has protocol parameters transparently managed through our governance portal since our project launched.
So even though OpenSwap is still in beta, we want our contracts to be as solid as possible. This is why our core contracts are audited by Certik, a leading blockchain security audit firm that combines manual testing, static analysis and formal verification for the most robust smart contracts security in the industry.
Furthermore, OpenSwap has partnered with TIdal Finance to cover users’ funds. In case of payout, the coverage amount will be paid directly to our team and we will distribute it to affected users. Currently the coverage includes contract vulnerabilities for core technologies deployed on Binance Smart Chain, and as additional core technologies such as OpenSwap Bridge gets deployed on mainnet, we will continue looking into insurance options so as to safeguard our users’ funds.
Could you demonstrate the “any to any” bridge and swap function?
Bruce: Yes! We have recently kickstarted the testnet phase of OpenSwap Bridge by deploying on Kovan, Fuji C-Chain, and BSC testnet. And in light of launching our bridge on testnet, OpenSwap had introduced a partnership campaign called — the Bridge Founders Program — where we would identify and invite hand-picked projects that we deem solid to become part of the first cohort in integrating with OpenSwap Bridge upon our launch on the mainnet.
The OpenSwap Bridge is now on testnet with Any-to-Any cross chain swap enabled. We can try that by swapping for $TEDDY (which is a token on AVAX) directly with any other token (other chains)! The process is simple:
Step 1: Select any token on either KOVAN or BSC’s Testnet:
Step 2: Select Teddy on AVAX and click “Create Order”:
Step 3: Confirm the swap:
Step 4: Confirm on MetaMask:
Step 5: Receive the token on the destination chain:
“How much additional liquidity do you reckon $TEDDY would be able to tap into through the upcoming integration with the OpenSwap Bridge?”
Bruce: With our bridge is it much easier to swap for teddy tokens from another chain. With cross chain being easier, there will be more funds moved to AVAX meaning that Teddy’s loan services might see a spike in usage.
“When will other chains in the swap page of OpenSwap be activated?”
Bruce: Right now we have our bridge supports 3 chains on testnet. We will be asking our community as to what chains we should add next.
“Can you explain why the OpenSwap bridge won’t be as vulnerable as the other existing bridges, like that Ronin hack from last month?”
Bruce: In the case of Ronin, they were hacked because 5/9 validators condensed were needed for transactions and Sky Mavis controlled 4. In our cases, there will be more validators and txn creators without a bond system which makes it not economic to launch an attack this way.
“Why you choose Binance Smart chain?”
Bruce: We chose BSC initially because of its quick block time and low fees. We have plans to support more EVM chains in the future.
“What’s the purpose of the Bridge Troll NFT I see on your dApp?”
Bruce: As mentioned, the holders of the Bridge Troll NFTs will be able to stake their NFTs and act as a validator, earning bridging fees.
“Can you tell me about your OpenSwap partnerships plans?”
Bruce: We mostly focus on the partnerships with Dexes. Our bridge works much better with the liquidity from other Dexes. This is because we would need their pools to swap for the desired tokens. With integration, users can get better bang for their bucks and LPs on those dexes can get more swapping fees. A win win really.
Teddy Cash is a fully decentralized borrowing protocol on Avalanche offering interest-free loans and high capital-efficiency. Its stablecoin, TSD or the Teddy Dollar, is Avalanche’s first censorship-resistant algorithmic stablecoin fully backed by AVAX.