Altcoins Talks - Cryptocurrency Forum
Crypto Discussion Forum => Cryptocurrency discussions => Topic started by: z3r0 on September 12, 2020, 06:13:10 AM
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Smoothy.finance
A novel single pool liquidity protocol specialized in same backed assets with low-cost zero-slippage swapping and maximum interest earning
DeFi industry trend
- The DeFi industry is booming with total value locked (TVL) reached >$8 billion USD recently
- The innovated Automated Market Maker (AMM) products with attractive returns has
contributed a lot in the DeFi ecosystem for such explosive growth
DeFi protocol specialized in same-backed assets
- There are multiple tokens backed by the same assets ( USD, BTC,
GOLD etc.) with need of swapping and financial management - Pricing slippage can be considerably high if using Uniswap and
there is no extra interest earned - Several ways are proposed to improve the slippage issue and offer
more financial options including StableSwap (accessible via
curve.fi) and mStable
StableSwap (Curve.fi)
Combining Uniswap invariant and constant-sum invariant
Pros:
- Less slippage compared with uniswap
Cons:
- Cannot guarantee 1:1 ratio for swap
- Need iterative computation, which leads to
Comparatively high gas fee for swapping - Existence of multiple pools reduces liquidity and
increases slippage
mStable
Can perform 1:1 swap as long as the
percentage is below a predefined weight
Pros:
- Simple
- Can swap any token with 1:1 ratio which
StableSwap cannot guarantee
Cons:
- Not flexible, swap is prohibited if predefined
weight is reached - Unfriendly for swap due to high gas cost
(because all backed tokens are transferred to
Compound/Aave)
SmoothSwap (Smoothy.finance)
Goal: single pool with low-cost zero-slippage
swapping and maximize interest earning
- Zero slippage*
- Swap anytime
- Low gas fee
- Better liquidity and LP rewards
*According to function of SmoothSwap: there will be a soft weights, If the soft weights are satisfied, 1:1 ratio swap will be performed; If not, swap
can still be executed by imposing a penalty
Method: Soft weights
- If the soft weights are satisfied, 1:1 ratio swap
- If not, a penalty will be imposed
Method: dynamic cash reserve algorithm
- Unlike Curve which has multiple pools used as swap-only (sUSD Pool) and swap+save (Y Pool), there is only one pool to concentrate the liquidity for Smoothy
- 10%* of the cash will be reserved for swapping while rest will be injected into Ytoken pool to earn interests. The rebalance will automatically take place if the % of reserved cash break range of (0%-20%)
Zero slippage
Guarantee 1:1 ratio swap for Smoothy as long as the pool is balanced
- All percentages satisfies the weight constraints
Swap anytime
Even the weight constraints are broken, the Smoothy protocol still allows the users to swap the tokens at higher price.
Low gas fee
- >80% lower gas fee for Smoothy based on ETH testnet compared with Curve
and mStable - The low gas fee is more swap-friendly for small-amount swap requests
Better liquidity and LP rewards
- Smoothy has one single pool to meet both needs of swapping and interest generation with low gas fee and high liquidity, thanks to dynamic cash reserve algorithm
- Curve has multiple pools which lead to liquidity reduction, for example: sUSD pool for swap
only and Y pool for swap and interest earning (with high tx fee for swap)
Better liquidity and LP rewards
LP can collect swap fee, penalty fee and automatically generated interest though Smoothy protocol
Features
- Swap: Swap same-backed-asset tokens at any time with lower gas cost
- Mint and Redeem: Conveniently provide and remove liquidity and get smooth token (sm)
- Save: Collect rewards by depositing smooth token (sm)
- Farm: Earn governance token (SMTY) via liquidity mining
SMTY (Smoothy.finance)
Value capture: SMTY is the governance token of Smoothy.finance
- To coordinate decentralized governance
- Incentive of the bootstrapping of asset liquidity
- The initial swap fee is set as 0.04%*, where 0.03%* will be
distributed to LP and 0.01%* will be converted to SMTY and then
burned - 5% of the interest earned will be converted to SMTY and then
burned
*The number can be changed by governance
Roadmap
Q2 2020
- Research
- Experiment code
- White paper
Q3 2020
- Documentation
- Product test and Demo
- V1 product launch including: swap/mint/redeem/save/farm and governance module
Q4/Q1 2020
- V2 product launch with advanced governance module
- Pricing function with better slippage
Q2/Q3 2021
- V3 Product launch with lending
Token distribution
- There is no private sale. The only ways to get SMTY token either by joining the test round through
application or providing liquidity in Genesis round after Smoothy is launched - For test round application: send email to [email protected] with brief introduction and what you
can offer for the community - For the emission rate of SMTY, we develop a pseudo-total-supply emission algorithm as the middle
ground of constant emission (infinite supply) and fixed-time reduction emission (fixed supply). This means that SMTY will have much less inflation than that of constant emission, while the emission is long enough
to attract LP to stay in Smoothy in the long term
Twitter: @smoothswap
Telegram: @Smoothy_finance
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Although the project looks good but i wonder how many liquidity protocols or defi projects we need because almost everyday we hear of a new project claiming to be the best in defi.