The decentralized finance (DeFi) space’s growth has been one of the major trends in the cryptocurrency world over the last few months. DeFi has allowed users to earn interest on their holdings, trade on decentralized platforms, and take out crypto-backed loans.
The DeFi space started growing on the Ethereum blockchain and interest in it was so massive that Ethereum’s network utilization is, according to Etherscan, now above 98%. This means transaction fees skyrocketed past $10 on average, and the network is so clogged transactions may take some time to be processed.
The market has responded to these conditions through innovation, meaning several DeFi platforms expanded to other blockchains with smaller transaction fees. Most protocols are now available on Ethereum and on the Binance Smart Chain (BSC), but cross-chain projects are also appearing.
One of these projects is WanSwap. It’s modelled after the popular Ethereum based Uniswap and SushipSwap automated market makers (AMM), which are currently two of the large DeFi protocols. It is, however, built on top of the Wanchain blockchain which gives it several advantages over Ethereum.
What is WanSwap?
WanSwap is an AMM, essentially a trading platform that allows for assets to be exchanged in a permissionless and automatic way by using liquidity pools rather than a traditional market of buyers and sellers. Users supply liquidity to pools with their tokens, and the funds in the pools are used to settle trades.
WanSwap, like most AMMs, allows users to provide liquidity and earn WASP governance tokens as a reward, similar to the UNI and SUSHI tokens earned on Uniswap and SushiSwap respectively. The WanSwap protocol, however, has a few advantages over their Ethereum-based rivals.
It takes full advantage of Wanchain’s cross-chain features to allow users to trade assets between multiple blockchain using the network’s cross-chain wanTokens. These include tokenized versions of top crypto assets, including wanBTC, wanETH, and wanEOS, along with several wanERC20 tokens.
Cross-Chain Trading
The platform functions similarly to Uniswap, with the added advantage of allowing for cross-chain transactions. Users aren’t restricted to tokens on a specific network and can instead trade between a number of public blockchains.
Let’s say a user is holding ETH on the Ethereum blockchain. The user can send the tokens to Wanchain as wanETH and trade the wanETH for wanBTC using the WanSwap platform. They can then trustlessly withdraw their wanBTC to a Bitcoin address on the BTC blockchain using what’s called the Storeman bridge.
WanSwap is, as such, a cross-chain decentralized trading platform built on top of the Wanchain network. Wanchain’s transaction fees are significantly smaller than those of Ethereum, as the network can handle up to 1,000 transactions per second. On the screenshot below you can see that 700 WAN were swapped for only 0.000156 WAN as a gas fee.
The trading volume on WanSwap has been surging over the last few months, along with the total liquidity being provided to the platform.
It’s worth pointing out that Ethereum’s developers have been working on scaling the network so it supports more transactions. Its upcoming Berlin hardfork, scheduled for April 15, will include several Ethereum Improvement Proposals (EIPs) that improve its “Layer 1” scalability.
While the much-anticipated EIP-1599 gas-saving upgrade is scheduled for July, the Berlin hardfork is an additional step on the road toward Ethereum 2.0, which is expected to significantly reduce transaction fees and confirmation times.
The WASP Token
Liquidity providers, as mentioned above, can earn WASP token rewards, along with the rewards from fees paid by the exchange’s users. The WASP token itself was launched by WanSwap’s developers without ap premine, or any token reserves for the team.
WASP has a total supply of 210 million and the tokens can be used for the community governance of WanSwap itself. Token holders can vote on proposals determining transaction fee rates, rule changes, funding, and more.
