The ease of converting one asset to another is known as liquidity. Liquidity drives human innovation as people seek ways of converting their assets into other assets, such as when they desire. With the rise of the DeFi economy, the need for a universally adapt automated market maker is greater than ever- step up Vegaswap.
Many factors determine liquidity, but it ultimately boils down to the availability of assets to be traded. Having a ready pool of assets to be converted to other assets is an uphill task. Vegaswap makes creating liquidity pools easy.
There are several existing challenges within decentralized exchanges
When the pandemic hit the US, a gentleman named Mr. Colvin, who bought and stocked over 17,000 bottles of hand sanitizer- realized he could not sell them. Imagine how that must have felt? That same feeling is undoubtedly what users experience when they cannot convert their assets into their desired assets, especially when dealing with large amounts. Like Mr. Colvin, we all want the ease of trading one asset for another without any hindrances or liquidity issues.
Then there is the problem that plagues some liquidity pools in the DeFi economy, impermanent loss. Imagine putting your hard-earned wealth into a pool that creates even more wealth, only to lose your wealth because of price volatility in the market. It’s an experience that users would certainly want to avoid while participating in the market.
Current Ethereum high gas fees are a strong impediment for the majority of users
Ethereum’s high gas fees also discourage participation in decentralized exchanges. Platforms that support only a single chain are usually characterized by high gas fees if trading on Ethereum. Vegaswap’s solution to these lingering problems is — Vegaswap — a cryptocurrency automated market maker designed with the optimum user experience in mind. While the stated issues above are just some of a litany of problems affecting current user experience, some of the most prominent issues faced by exchange users include:
- Inadequate flexibility and extensibility in the DeFi economy.
- Abnormal price volatilities are leading to unfair outcomes in the market.
- No circuit breaker or control of liquidity providers.
- Front running issues.
Automated Market Maker aiming for Fluid Liquidity
Vegaswap is an automated market maker built to meet the dynamic demands of the DeFi economy. Its design enables a wide range of applications in DeFi, while also providing cross-chain solutions.
So how does Vegswap aim to disrupt the status quo and find long-lasting solutions to the quagmire of DeFi issues? Well, their automated market maker protocol introduces the following:
- Dynamic Curve refers to the price changes of assets based on volatility, volume, and transaction acceleration. Asset prices on liquidity pools will change based on these four parameters. This will help significantly reduce the impermanent loss for liquidity providers in the pool.
- Through smart pools — these will enable trading of all types of assets in the decentralized industry. Stablecoins, major coins, and highly volatile assets are all accepted in the smart pools. They will rely on the Dynamic Curve to create some form of trading stability within these pools.
Vegaswap users will have the option of creating different smart pools for different trading pairs with customizable options, including a custom pricing function. Pool shareholders will get access to analytics tools necessary for monitoring and optimizing pool performance.
- Multichain — Supporting all types of assets means integration and support of other blockchain protocols on Vegaswap. The platform accompanies multichain with a bridge approach making both on-chain and cross-chain trading possible. Binance Smart Coin (BSC), Ethereum (ETH), and Polkadot will be supported on Vegaswap. The cross-chain support enables the platform to avoid high gas fees, optimize transaction costs, and improve the overall user experience by supporting as many trading pairs as possible.
- Stablecoins — The platform will feature Ethereum and Binance Smart Chain based stablecoin trading.
All these measures are strategically in place to invigorate a robust economic network for liquidity providers and traders. They are tied together by an intuitive UI that is inherently user experience orientated and rapid on response to make the entire experience a memorable one.
User benefits and Incentives
The most crucial aspect of Vegaswap will be its community. Vegaswap’s ecosystem relies heavily on their participation and interaction on the platform. The user-centered approach of Vegaswap influences the platform’s design.
Users on the platform are incentivized to provide liquidity through liquidity mining. They can contribute digital assets to as many pools as possible, earning from each of them based on the amount of liquidity provided. The platform rewards its liquidity providers through its native token.
Vegaswap will also feature liquidity grants, which are essential in supporting the creation of innovative pools. This will attract more people to become creative with their smart pools. It also empowers the Vegaswap ecosystem with a variety of partners.
Vegaswap provides a platform capable of automated market making to enable a wide range of DeFi applications. Its existence proves vital to the success of the DeFi economy through a dynamic market maker system that provides liquidity, encouraging trading of assets. There is no doubt Vegaswap will be challenging established industry titans such as Uniswap and Sushi on the pantheon of automated market maker protocols within time.
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