The world of decentralized finance is booming and there’s no shortage of new platforms joining the field every day.
This is perhaps best seen in the overall market growth by means of total value locked in various DeFi protocols. At the time of this writing, it stands at above $32 billion, charting the growth of more than 6000% in less than one year, according to data from the popular monitoring resource, DeFi Pulse.
With this, we saw the massive surge of popularity of many decentralized exchanges and automated market makers such as Uniswap, 1INCH Exchange, SushiSwap, and others alike.
However, another thing to consider is the relatively new phenomenon called Initial DEX Offering (IDO). This is a new way for projects to raise money by distributing tokens to the members of their community in a transparent way.
One platform currently tends to stand in the lead and that’s Polkastarter. However, there are plenty of issues that are evident with it, especially as Ethereum’s network sees massive user growth and skyrocketing gas fees.
Hundreds of users have complained that even after getting a placement in the white list of different projects (which is challenging enough), they were unable to receive their tokens despite spending hundreds of dollars on gas fees because someone outbid them.
And this is an issue that Polkastarter seems unable to address. This is where FalconSwap comes into the picture.
Being much more than just an aggregator for IDOs, FalconSwap offers some unique capabilities, and below I’m making the case as to why it has (in my opinion) tremendous potential in the mid to long-term.
What is FalconSwap?
FalconSwap brings forward a layer 2 protocol for decentralized token swaps and token pools. Its capabilities introduce several benefits compared to competitive platforms, including but not limited to privacy, lower gas fees, aggregation, no frontrunning, token lockups, instant transactions, and so forth.
In this overview, I will focus on the exchange and the token pools, as well as taking a closer look at the FSW tokenomics, current distribution, and my thoughts on how it will develop in the mid to long-term.
FalconSwap Exchange
First things first, let’s talk about the exchange. FalconSwap’s layer 2 exchange is a scaling solution that is built on Uniswap and further extendable to aggregate other popular DeFi platforms such as Kyber, Balancer, Bancor, Mooniswap, and so forth.
Right off the bat, this brings a serious advantage compared to other decentralized exchange platforms - liquidity. FalconSwap taps into the liquidity pools of the predominant DEX out there - Uniswap, making it particularly convenient for users to swap tokens without the hurdles of the base layer.
The cornerstone of the protocol is built around the following components:
- Layer 2 Order matching - this means that orders are quickly matched in the second layer and aggregated before accessing the liquidity from the Uniswap pools.
- It’s non-custodial - users never have to give up access to their private keys. They can trade with complete security as FalconSwap offers the trading experience (which we will get to later) of a centralized exchange with the unparalleled security of decentralized exchanges.
- Trade Aggregation - the protocol aggregates the orders of multiple users across multiple liquidity pools from Uniswap, Mooniswap, Kyber, etc. This reduces the transaction fees tremendously - an issue we are all too familiar with when using Uniswap.
Sleek and familiar UX/UI
This is another major consideration. User experience, as well as user interface are focal points for adoption - the solution needs to be easy and intuitive so that users can interact with it freely and without any hassles.
That’s what FalconSwap brings. Now, at this point, it’s worth noting that their exchange is still in beta, which is something else I’m quite excited about. This is how it looks like:
Those of you who’ve used Uniswap can see the similarity. This is the overly adopted model of most DEXs and FalconSwap brings it in perfectly. All you need to do to interact with the platform is to connect a wallet such as MetaMask, and start swapping.
However, once you decide what tokens you want to swap, you will notice something differently - a timer that says when the next swap is going to happen (it’s a 1-minute interval) during which time orders are aggregated. As mentioned above, this severely reduces the transaction fees.
At this point, users can only swap ETH and the platform’s native token - FSW, but I’m more than excited for the next milestone in their roadmap which would allow the swapping of multiple tokens, tapping the liquidity of multiple venues, as well as staking capabilities.
To sum it up, some of the advantages of FalconSwap Exchange are:
- Low slippage
- Lower gas fees
- Privacy
- Security
- Order aggregation
FalconSwap Layer 2 Token Pools
Falcon Pool is another feature of the protocol that (in my opinion) can change the IDO scene for the better. This feature-packed product is another step of the team towards building a fully-fledged DeFi ecosystem and capturing the maximum value for their tokens (we’ll get to that soon).
So, in essence, FalconPool is a platform that harnesses the recent popularity in crowdfunding activity - a growth that has also exposed the massive shortcomings in many competitive products.
To handle these, FalconPool brings forward the following features:
- Complete Decentralization - the pool doesn’t require a centralized custodian holding the funds. There is also no need for users to deposit funds in the smart contract to participate in each sale.
- Zero Gas Fees - that’s right, you don’t have to worry about the looming issues of gas wars that are currently riddling the space. This also chokes the blockchain with thousands of transactions.
- Aggregation - FalconPool aggregates all the contributing transactions, hence handling the massive fees in the process.
- Token Distribution - this is usually a rather fragmented process that FalconPool handles elegantly - the platform will escrow the project’s tokens and issue the locked tokens to the contributors immediately after the pooling is completed.
- Token Unlocking - the tokens issued to the contributors can be unlocked by the creator of the pool before, after, or at any point in them relevant to their exchange listing - it’s all dependant on the pool creator’s preferences.
- Permissionless Pools - FalconPool allows the creation of permissionless pools where all users can participate.
- Featured Pools - in addition to the above, pool creators can also make pools allowed only for FSW token holders.
But what about the process and the UX/UI?
As already mentioned, UX and UI are crucial. FalconSwap has done its best to offer a seamless user experience when participating in its FalconPool IDOs. The process is particularly easy.
This is how the platform’s latest pool (which is now completed) looks like:
Again, you need to connect a wallet before anything else. Once the pool becomes active (it’s announced in advance), that red button becomes clickable and all you need to do is enter the amount you wish to allocate (currently in USDC) and then click it.
That’s it - nothing else - then you just wait. If you made the cut, you will have your tokens allocated to your wallet and the USDC withdrawn automatically - no high gas fees, no frontrunning, no issues.
All you need to do is sign the transaction and approve the USDC swap, which is a one-time transaction that you can’t circumvent anyway, so there’s nothing that can be done here.
There’s a comprehensive dashboard that allows you to see at which point in time the entire process is (Processed -> Redeemed -> Unlocked) and this is quite transparent and convenient.
Again, let’s sum up some of the benefits:
- No gas wars
- No frontrunning
- Instant transactions
- Token lockups
- Permissionless
- Featured
- Decentralized
The FalconSwap Token (FSW)
Now, let’s look at the token. The native cryptocurrency that powers up the entire ecosystem is called FalconSwap Token (FSW). It’s currently listed on both CoinMarketCap and CoinGecko and has a total market capitalization of around $11 million (at the time of this writing).
Holding and staking FSW tokens offer various benefits. These include:
- Access to featured FalconPool IDOs
- Token burn - 10% of the trading fees are used to buy and burn tokens
- Staking rewards
- Liquidity mining - you can mine FSW tokens when you trade on FalconSwap
- Fees discount - FSW token holders pay discounted gas and trading fees.
It’s also worth looking at the tokenomics. According to a document shared by the team, this is how the overall distribution looks like:
Total Supply: 100,000,000 FSW tokens.
In terms of the sales, these are the prices:
Private Sale 1: 0.000100 ETH (total of 1500 ETH raised) - 15M FSW
Private Sale 2: 0.000120 ETH (total of 1800 ETH raised) - 15M FSW
3 million FSW and 450 ETH were provided as Uniswap liquidity.
The seed pool was locked for 9 months, while the team and advisors’ tokens are locked for 24 months.
All in all, 100M total supply seems quite acceptable and similar to that of what I consider to be the project’s main competitor - Polkastarter.
The Strong Points for FalconSwap
Gas wars are only going to become much worse in the future until Ethereum 2.0 comes out because these scaling issues and sky-high transaction fees are not going away especially as more and more people join the DeFi space.
This said, I think platforms such as Polkastarter don’t provide the most efficient solution. FalconSwap, on the other hand, takes an intelligent layer-2 approach, essentially eliminating all of this right off the bat.
This is why I personally think the project has a very high probability of overtaking its competitors in terms of market dominance, provided the team continues its good work.
With this said, there is work ahead - the FalconSwap’s official launch is expected this year and it will expand the capabilities of FSW token holders.
Yet, the more projects launch successfully on the FalconPool, the more investors will jump on board and stack FSW in order to increase their odds of being eligible. The last project that was launched was Gourmet Galaxy and its token did an amazing 1300% return hours after the Uniswap listing, providing investors with handsome returns.
This will eventually catch fire and the word will spread, increasing the demand for FSW tokens.
None of the above should be considered financial advice. I'm not a financial expert. Always do your own research and don't risk money you can't afford to lose.
