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Hey Humans,
Just after the global news outlets acclaimed the death of Crypto again only a while ago, ADA just hit a new all time high of 2,54 $, after the last one being around 2,50 $. Cardano is the third biggest cryptocurrency by market cap, and the gap between them and BINANCE Coin ($BNB) and Tether ($USDT) seems to be growing every day. After the article announcing SundaeSwap's Live Demo, I wanted to do a little follow up on how the first live swap on Cardano testnet went, and what they've announced.
Key Take Aways from ther Live Demo
Dan Gambardello from Crypto Capital Venture got together with SundaeSwap's leading developer Pi Lanningham. Yes, he's a mathematician and his name is ?. Dan and the community got the chance to ask a lot of questions, and we all got a little insight in how the DEX and a swap on it will look like. I tried to summarize the key take aways for you below:
What is SundaeSwap?
SundaeSwap is intended to be the premiere DEX (Decentralized Exchange) on the Cardano blockchain. Decentralized means, that there is no controlling entity. The DEX will be governed by the community through their governance token $SUNDAE.
What can you do on SundaeSwap?
All those exciting projects that launching on Cardano will have their own token, and SundaeSwap is aiming to be the place where those are traded, and where you can get those token.
Who are the founders?
Sundae was founded by Artem Wright and Mateen Motavaf, which are both students on the Boston University. They met in September of 2020, and after they got to know each other better they learned about PancakeSwap. Both loved idea of DeFi in general and when they learned about Cardano and it's upcoming launch of Smart Contracts, they decided that they want build their own protocol.
What was the process?
Artem and Mateen put together an initial team and built a community, and the response was overwhelming. As they had the feeling they had more of a brand, than a product, it led to the decision to let go the previous team and level up their technical talent. And they surely did: SundaeSwap hired Pi as their Lead Dev, and Matt Ho as CTO. Check out their full team here.
Even thought they were a little bit late to the space, only really evolving around the end of submissions for Catalyst Fund 5, but they were able to catch up due to their highly experienced developers, advisers, and partners.
Live Demo
Welcome Screen (09:40)
After a brief Q&A it was time for the first live swap on the testnet. Dan entered the App and was welcomed by a modern looking UX in soft colors. This is the overview you would see as a home screen. The data shown on here is not real.
Liquidity Pools (11:39)
The Liquidity Pools on the other hand, are wired up to real data. There are three sample pools with funds, that are locked on the blockchain:
- Rasperry & Strawberry Pool
- Fudge & Sprinkles Pool
- Chocolate & Vanilla Pool
The concept is similar to other projects such as SushiSwap and PancakeSwap. Pi explained the functionality and the workflow of creating a new token pair, locking funds in a smart contract.
Look at this beautiful dark mode:
Token Swap (14:20)
Dan shows how to pick a token pair to swap them for each other. You can see, you will be able to see your transactions on Cardanoscan. All swaps will be fully decentralized, and hosted on IPFS.
Functionality on Launch Day (21:15)
It's not final yet, but what Pi was able confirm is:
- Creation of Token Pairs (Liquidity Pools) > Liquidity Farming (Decentralized Profits)
- Governance > Creation of Proposals, Voting (Community decides on future updates)
- Yield Farming > Stake LP token for additional rewards
Wallet Integration
SundaeSwap is not integrating with any wallets at this moment, because they are still waiting for the dApp bridge, which should bring functionality to wallets like MetaMask, and They are anticipating that there will a couple of wallets, that the can integrate with, such as Yoroi, Nami, and Gero Wallet.
Recent News on the ISO
?? Fun Fact: The ISO was an idea of the SundaeSwap community. The team picked the idea up, and made it real. As SundaeSwap is based in the USA, they had to fight some regulatory hurdles, that delayed the ISO. In the meantime some other projects also adapted the idea. SundaeSwap had to make some adaptions to the model, to make it legally possible.
The ISO (Initial Stake Pool Offering) is launching alongside their DEX in mid October. The date is not final, and still object to change, but it is looking good.
As the DEX will launch alongside with the ISO, it is no fundraising vehicle. The project is already built. This way you are able to keep your ADA staking rewards and will get SUNDAE token on top of that. SundaeSwap is using the ISO more as a marketing vehicle and a way to get people excited about the project.
They will distribute 5% of the token supply over the time-span of 5 epochs (1% per epoch over 25 days) to all participants of the ISO.
To participate you have to delegate your ADA to one of their Stake Pools. The starting date and the stake pools have not yet been announced, so you still have a little time, to get your ADA off the Centralized Exchanges.
SundaeSwap is working on a whale control mechanism, to ensure a fair distribution among as many people as possible. Because of this, details about the distribution and the formula behind it are not finalized yet.
Since $SUNDAE is also their governance token, they are able to use the ISO as a tool to build a decentralized voting body. That means, all early adopters and heavy users will have a chance to decide about the future of the project.
?? Hardfacts ISO Start: mid October (not final), alongside launch of DEX Rewards: 5% of token supply over 5 epochs (25 days in total, 1% per epoch/5 days) ADA Rewards: You keep them Stake Pools: not yet announced, will be run by trusted members of the community
3 Ways to Accumulate the $SUNDAE token
You already know about the possibility to get some SUNDAE token in exchange staking your ADA (ISO). Two additional methods to claim some of the highly demanded token:
The second method would be to act as a Liquidity Provider on their protocol. xxx said on the stream, that you haven an even higher chance to earn Sundae this way.
The third method would be to simply buy the token on their DEX. Bearing in mind how some DEX-token on other networks behaved, you could swap your ADA for SUNDAE for example. In case the SUNDAE token has a faster growth than ADA, you could later profit swapping the SUNDAE back to ADA (definitely no financial advice, just to make an example).
Whats the difference to other DEXes?
Pi teased some interesting plans, but couldn't speak all of them out loud due to the fact that a lot of competitors are about to launch as well.
There are some big partnerships, one of them being Liqwid Finance, bringing Liquidity from Day 1. Liquidity brings with it capital efficiency, which means less slippage, and therefor your orders finalize closer to market price.
Also the team is working on some novel liquidity farming mechanisms, to make possible things like yield compounding and alternative sources of income for liquidity providers.
Pi said that SundaeSwap is focusing on integrating with other products, to create a rich interconnected Cardano ecosystem, that benefits everyone.
Transaction Fees
Pi gives an example of Uniswap, where you have to pay two different fees for your transactions. You have to pay for the transaction fee to the miners, to allow your transaction get processed by the network. On top of that you have to pay a swap fee to Uniswap's liquidity providers, for using their service.
One of Cardano's unique features is that it has low transaction fees, which are always predictable. It's impossible by default to underspend on transaction fees, and you also can't overspend - so nothing gets wasted. You know what the fees are, before you can submit a transaction to the blockchain.
The fees in Cardano are a so called Protocol Parameter. This means, they can be adjusted through decentralized governance. Right now the transaction fees on Cardano are 0,17 $ADA per transaction. If Cardano's prices keep growing, a proposal to lower the fees could be created, and network participants could vote on it.
SundaeSwap's own fee structure will be announced shortly.
What will the initial token price be?
In the end, the market will have to decide about the initial cost of the SUNDAE token. Due to SEC regulations, the price can't be set by its issuer.
First Testnet Swap NFT
To celebrate the moment the SundaeSwap team live-minted an exclusive NFT including the transaction hash:
SundaeSwap Partners
Liqwid Finance - An open source, algorithmic and non-custodial interest rate protocol built for lenders, borrowers and developers.
Indigo Protocol - An algorithmic, autonomous synthetics protocol for on-chain price exposure to real-world assets, built on Cardano.
MLabs - A Haskell, Rust, Blockchain and AI consultancy company.
Cardstarter - A decentralized accelerator and swapping platform, connecting early stage Cardano innovators with our community of donors.
Who are the competitors?
Ergodex - Minswap - Cardax - Adax (sketchy) - FlanoSwap (SCAM)
My personal opinion
I really love the modern design and it looks easy to handle. This takes off the entry barriers, and in my opinion crypto can only find real adoption, if it is accessible to everyone.
Ok - SundaeSwap is probably not changing the world with its DEX, but it seems to have a solid vision and mission behind it. The project is not profit oriented, and strives for fair governance, which makes it perfectly fitting for the Cardano ecosystem. Sundae's team is open with their process, and they have a great team of professionals and developers, where of some are known in the space for a long time. This is what makes them the most legit DEX for me so far. Finance for the people!
I hope I was able to catch the most important news for you. You can watch the recording of the whole thing yourself:
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