Victor Ugochukwu · Oct 21, 2020 . 5min read
DEX Aggregator 1inch.exchange Releases Automated Market Maker – AMM, calls it Mooniswap
The team behind the growing DEX platform, 1inch.exchange announces the release of an Automated Market Maker - AMM and calls its Mooniswap.
By Victor Ugochukwu · Aug 11, 2020 . 8min read
The team behind the growing DEX platform, 1inch.exchange announces the release of an Automated Market Maker – AMM and calls its Mooniswap. 1inch.exchange claims its revolutionary solution that addresses problems such as slippage and front running attacks most DEX users experience.
Born out of in-depth research and keen observance of the market, 1inch.exchange finally rolls out. The development team thinks this will solve an age-long problem plaguing existing DEXes like Bancor, Uniswap, Curve etc.
As the team describes it,
Mooniswap is the next generation of an automated market maker with virtual balances — enabling liquidity providers to capture profits otherwise captured by arbitrageurs.
The development team says the new AMM is capable of keeping most of the slippage revenue in the pool. It does this by maintaining virtual balances for different swap directions. When a swap happens, a market maker does not automatically apply the invariant algorithm and displays the new prices for upcoming trades.
As most DEX platforms make liquidity providers suffer losses when they initiate withdrawals in unfavourable conditions termed impermanent losses, 1inch .exchange’s AMM – Mooniswap does it differently.
The AMM improves exchange rates for arbitrage traders slowly, over approximately 5 minutes. As a result, they will be able to collect only a portion of slippage, while the rest will remain in the pool shared among liquidity providers. 1inch.exchange believes this to be a game-changer and the exact solution the industry needs at this time. Its technique will cause a delay in price updates. This is turn results in a competitive race from arbitrageurs who are mostly bots exchanging with a pool after a trader completes a swap to bring the price back to the market price. With Mooniswap pricing update mechanism forces to perform trades at less profitable prices. Therefore, this adds value to the liquidity providers’ side.
Tested across other DEXes, 1inch. exchange new AMM should help generate significantly more income for liquidity providers as Mooniswap goes live
Additionally, to lend further credence to their claims, Mooniswap development team shows the results of multiple simulations conducted.
The charts above show the comparison of the results of liquid markets on Uniswap V2 against Mooniswap. Conclusively, Mooniswap, according to data from the simulation, guarantees liquidity providers income range between 50% to 200% more than Uniswap.
Also, Mooniswap comes with on-chain volume-weighted average price oracles, VWAP for short. VWAP oracles help to combat manipulative tendencies by malicious actors in price oracle data.
Lastly, Mooniswap developers are wooing wallet service to implement their solution with Referral Fee incentivization. It fixes referral fee at 5% of income earned by liquidity providers on the trade.
1inch.exchange volume keeps growing even as DEX volume explodes
1inch.exchange has been doing well over time. Looking at data from Dune Analytics, it shows more than $1.4 billion has been transacted so far on it.
In fact, traders exchanged assets worth over $600 million in volume for July. And this may improve as Mooniswap is finally released. Perhaps, the DEX’s current slightly over 18,000 users should see a spike in the coming months.
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Victor Ugochukwu · Oct 20, 2020 . 5min read