QuipuSwap is the decentralized exchange on Tezos with the most liquidity. Many other Tezos projects have partnered with Quipu and use its Liquidity Pool tokens for framing. The development of the DEX has been on stagnation for a while now but it seems that it will soon launch a stable swap feature and farming opportunities for its native cryptocurrency.
QuipuSwap works like Uniswap, or really almost any other DEX does, with liquidity pools and an AMM. The tokens are pooled in trading pairs where they can be swapped with the paired token at a price that is set automatically based on their supply. Liquidity providers receive LP tokens that represent their share of the pool and they can redeem their share any time by burning the LP tokens. The liquidity providers are earning the trading fee of 0.3% which is directly added to their share of supplied tokens, but this is not without risk because they could suffer from impermanent loss. This is the standard for decentralized trading.
One thing that makes Quipu unique and a great option for providing liquidity on Tezos is that it lets you earn staking rewards on provided XTZ. This is possible because the Tezos blockchain is featuring a liquid type of staking that doesn't require you to lock your coins. People that are providing XTZ to a trading pair can still delegate their share of XTZ to a baker and earn staking rewards with them. Most other DEXes try to achieve a similar thing by using wrapped XTZ that is backed by XTZ that can earn baking rewards, but they don't support direct swaps between XTZ and Tezos tokens.
The exchange is also used by most other applications on Tezos. Crunchy DeFi allows developers to distribute their tokens thru farming to people that stake chosen Quipuswap Liquidity Pool tokens there. Some projects like Kolibri also created their own farms for Quipu LP tokens and even competing projects like PlentyDeFi and Alien'sFarm were using Quipuswap to distribute their own governance tokens.
There hasn't been much development since the launch and the initial airdrop of the QUIPU token, but this will change soon. There will soon be farms ready where liquidity providers will finally be able to earn QUIPU tokens. It will also soon have a special stable swap for assets that have the same value, like stablecoins or different types of wrapped tokens, in a cost efficient way, similar to how Curve Finance works. But most important is that QuipuSwap will also slowly improve its governance to finally reach decentralization.
The QUIPU Token
QUIPU is the governance token of the QuipuSwap applications. It will be used to vote on proposals to change the platform and it will likely also be used to pay for additional services that could be implemented in the future.
There is a max supply of 10,000,000 QUIPU. So far there have been 2 airdrops to long term users and less than 10% of the total supply is circulating right now. 13.5% of the total supply went to the founders, 10% were reserved for future partnerships, 5% were set aside for development grants, 0.5% are used for public testing and the remaining 71% will be used for community rewards which includes the airdrops and the future rewards for liquidity providers. Since the farming of the token will begin soon there will be a huge increase in the supply in the near future.
Like always the value of the token depends on how many funds are held in its smart contracts and on how many people use the application. Since it’s the biggest DEX on its blockchain and many of the other Tezos projects are utilizing it too, it will likely grow together with Tezos. The Tezos blockchain has survived multiple bear markets and is relatively popular and its DeFi ecosystem has been constantly growing since mid-2021.
However, there is no shortage of decentralized exchanges on Tezos. There is PlenyDeFi, Alien'sFarm, FlameDEX, SpicySwap and many more. Especially PlentyDeFi is a strong competitor since it has almost as much liquidity and even had more during its peak in October last year. Also, there hasn't been a lot of demand for Tezos tokens in the last few months, that’s why the value of the total liquidity of both Quipu and Plenty is almost only a tenth of what it was a few months ago.
At the time of writing this, there is no centralized exchange that offers the QUIPU token, but you can buy it directly on the QuipuSwap DEX if you have some XTZ. You can store your tokens in a Temple Wallet, which you can also use to interact with the DEX.
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