Exploring the benefits of the EmiSwap AMM DEX
The decentralized finance (DeFi) sector has had a remarkable few years. Since the beginning of 2018, the industry has grown steadily. The introduction of automated market makers has been a major driver to the expansion of the DeFi business (AMMs).
AMMs are decentralized exchange (DEX) protocols that utilize a mathematical formula to price assets, as opposed to centralized crypto exchanges that utilize order books. They permit users to exchange tokens without the need for a counterparty. To keep the system functioning, AMMs often rely on liquidity providers (LPs). LPs, therefore, are encouraged to provide liquidity.
Having said that, EmiSwap's arrival into the DEX arena is likely to shift the story. EmiSwap, spurred by the drawbacks of existing protocols, intends to shift liquidity from larger protocols to its platform by providing its users with more benefits. EmiSwap markets itself as the “first community-governed DEX with NFT mechanics.”
The EmiSwap AMM DEX
In 2020, Gregory Rybalchenko launched the Decentralized Developers’ Group, the primary aim of which is to create the first fully autonomous DAO and its first project — EmiSwap.
As an automated market maker exchange supplemented by an ESW governance token and yield-boosting NFT Magic Cards it is an open-source, decentralized platform, a fork of Uniswap V2. EmiSwap distributes 100% of trading fees to liquidity providers and ESW token holders who then vote on the ecosystem’s future growth. The EmiSwap protocol offers Ethereum gas fee refunds and an NFT-based loyalty program to pro-active users.
EmiSwap was released on March 31st. Since then, the protocol has welcomed over $550,000 in total locked value (TVL). It also received $1.3 million in startup financing for its ESW cryptocurrency during pre-seed and seed rounds. So far, the blockchain project's future appears to be promising. Aside from its success in garnering investment and liquidity, the protocol has passed a security test conducted by Hacken, a major blockchain security firm.
The EmiDAO Ecosystem
The EmiDAO ecosystem is the world's first autonomous DAO, allowing the community to be the project's proprietors and make decisions about its future evolution. The EmiDAO alliance’s first project is the EmiSwap AMM DEX, and its partners – Alpha Sigma Capital investment fund, DigiFinex, Bitmart, Emirex, and HollaEx centralized exchanges, IDCM, MahaDAO and Everest KYC provider - take an active role in running and marketing the new DEX.
The Rewards for LPs & Swappers
EmiSwap typically pays 0.25% of all exchange transactions to LPs, but rewards for the first 100 days following release will multiply. How so?
- 100% Ethereum gas fee refunds for any operation in ESW governance tokens.
- 30,000 ESW is allocated to LPs daily in proportion to each million DAI trading rate
- 40,000 ESW is distributed to LPs regularly.
- ESW holders earn 0.05 % of regular trading volume and vote on product innovations.
- LPs can receive limited-edition NFT cards by crossing TVL milestones.
- - A hypothetical scenario to assess how competitive EmiSwap is in terms of rewarding liquidity suppliers shows one possible outcome of a 107 % APY. Let’s say you provide USD 100,000 in liquidity for the ETH/DAI token pair.
- - You spend 100 USDT for gas and receive 435 ESW in return. The liquidity of EmiSwap is 20,000,000 DAI and your stake is 0.5%.
- - The daily transaction volume is 3,000,000 DAI, 7,500 DAI are distributed between LPs daily. You earn 37,5 DAI every day.
- - 90,000 ESW is provided proportionately to LPs, divided into 30,000 ESW for every 1 million trading volume. Therefore, you get 450 ESW per day.
- - Liquidity providers also receive 6,150 ESW for every 1,000 blocks. There are 6,800 blocks per day, so 41,820 ESW are distributed across LPs. Your daily bonus is 201 ESW.
- - Your daily bonus in this case is 37.5 DAI + 651 ESW.
- - You also get 0.05 % a day from your ESW tokens.
- - In this hypothetical calculation, your monthly earnings would be 1125 DAI + 19,530 ESW.