Decentralized Finance and the reasons behind its success
Ever since the emergence of cryptocurrency and blockchain technology, more investors and traders have entered into the crypto space and the trust in these exchanges has increased. In such a scenario, the concept of Decentralized Finance came into place and blew out all restrictions in the financial sector.
DeFi or Open finance stripped away the power and authority of centralized bodies held in the financial sector. Human gatekeepers and centralized systems were barriers to several aspects of carrying out transactions. The asset owners never had full control over their funds, the time-consuming processes were demanding and security was an issue. DeFi came in and Decentralized all the financial applications such as loans, crowdfunding, insurance, exchanges, lending and borrowing of assets, betting, etc.
DeFi simply removed the ‘middlemen’ from these operations with the help of Smart Contracts built on the Ethereum network. All of the aforementioned applications have become completely automated. Many other protocols and applications have been developed keeping the main premise of DeFi in mind. Discussed here is one such protocol – FalconSwap.
As a business owner or entrepreneur looking for your next big breakthrough, developing and launching your own DeFi protocol like FalconSwap can widen your user base in the crypto landscape. In this blog, all information on the protocol such as how it will benefit your users and yourselves is discussed. Hopefully, by the end of it, you will partner with us for your Decentralised protocol development needs.
The Current Scenario
Before we get to answering that question, one must be aware of the functions of another DeFi protocol called Uniswap. It is one of the most popular Decentralized exchanges (DEX) that has been a product of DeFi. In Uniswap, users can trade and swap digital assets on the Ethereum blockchain. The mechanism goes something like this, users on the platform can trade and swap ERC-20 tokens with either ETH or with ERC-20 itself. The protocol contains liquidity pools where the tokens are swapped and since users provide liquidity, they will receive an interest rate for it. The exchange is completely permissionless and decentralized.
But here is the problem. Ever since the advent of Uniswap and DeFi, more investors and traders are flooding the Ethereum network for their exchange needs. In August of this year, Uniswap became the first Decentralized Exchange (DEX) platform to overtake one of the biggest US-based crypto exchanges – Coinbase. In Q3 of 2020, the total value locked in DeFi protocols has escalated from USD$1 billion in June to $9 billion in September. There is a high demand for space on the network. This has simply increased the gas fees for doing transactions. For example, around 15,374 ETH (US$ 3.5million) was spent as a gas fee on the network in June 2020. Clearly, this was a scaling issue that the DeFi space did not anticipate. To enable users to make the most of the DeFi ecosystem and trade in their tokens for the highest yield, a solution – FalconSwap came in.
An Effective & Beneficial Niche – FalconSwap
Described as a layer 2 scaling solution, FalconSwap was built on Uniswap and it further aggregates other DeFi protocols like Mooniswap, Kyber, Balancer, Airswap, Bancor, etc to give users the best interest rates on their tokens. It also solves the issue of gas fees and slippage issues by aggregating the orders prior to sending them to the various liquidity pools. The protocol has an order matching engine that matches orders that are in layer 2, i.e the Falcanswap platform and sends the remaining to other protocols and liquidity pools.
In other words, FalconSwap is a 3-in-1 machine that operates as a liquidity aggregator, order aggregator, and as a layer 2 matching engine. FalconSwap entirely has solved all the ongoing issues that users faced with DeFi protocols.
The Workflow of the FalconSwap Protocol
Alright, so this is how the DeFi protocol Falconswap works.
Assume two buyers want to buy 4 ETH and 6 ETH respectively and two sellers want to sell 6 ETH and 8 ETH respectively. What FalconSwap will do is aggregate all 4 orders and the 10 ETH buy orders will be matched with the 10 ETH sell orders. The remaining 4 ETH sell orders will be distributed among other protocols or liquidity pools.
If the same trade were to take place in, say Uniswap, the 4 buyers will have to pay 4X gas fees to execute these orders and incur slippage as well. But with FalconSwap, the users can save up on the gas fees and slippage will be optimized. In fact, trading fees can be reduced by 80% on the DeFi FalconSwap protocol.
What are the problems FalconSwap solves?
- It solves the issue of paying huge transaction fees
- Users can enjoy total privacy while transacting on this platform
- The speed at which trading and exchanging is done has improved profoundly
- The user experience has changed from being awful to extraordinary
Other User benefits of FalconSwap will include
- Layer-2 matching
- Privacy trading
- Faster execution of transactions
- DEX aggregation
- Liquidity mining
- Earning FSW tokens
- Trade is initiated using private keys with complete security
- FSW stakeholders will gain additional benefits while trading with the protocol
FSW Tokens – Are they really worth the hype?
The native token of FalconSwap is the FSW Token and it comes with a host of benefits for the token owners. The FalconSwap tokenomics has been arranged and conceived in such a way that a slew of incentives for both the FSW token holders and users of the protocol are provided.
Let’s briefly go through these benefits
- Savings on fees – as mentioned earlier, the FalconSwap protocol is designed to reduce the gas fees users end up paying on other DEX. Holders of the FSW token will get an extra discount of up to 50% atop the savings from layer 2 execution.
- Staking benefits – users who already own FSW tokens and are currently staking them will benefit from the protocol with extra FSW tokens that are distributed to them (the stakeholders). These tokens are bought from the fee that is collected in the FalconSwap protocol.
- Trading fees – this is another advantage that the FSW token staking holders can enjoy. A part of the trading fee that is being collected by the protocol is used again to buy FSW tokens and are distributed among the token stakeholders. Apparently, owning and staking FSW tokens is a prudent investment.
- Token burn – around 10% of the total fees collected from the protocol is being used to buy and burn FSW tokens. This ensures that the token prices will remain higher and fairly stable.
These above-mentioned points make a fair statement. Users investing in FSW tokens are in for an uncounted number of benefits and advantages that will hold their interest in using the DeFi protocol. In the month of September 2020, according to CoinGecko, FSW tokens hold the rank of 381 out of 5890 coins. Currently, around 35 million FSW coins are in circulation with the limit exceeding up to 100 million coins.
Create your own Decentralized Protocol like FalconSwap with Blockchain App Factory!
Today, you too can develop and launch a Decentralized Finance protocol like FalconSwap and make a profitable gain. All you need to kickstart this lucrative business is to trust a well-grounded DeFi protocol development company to create a decentralized exchange protocol like FalconSwap. And we have got the perfect solution for you – Blockchain App Factory.
With several years of experience and a team of accomplished and adept developers, we at Blockchain App Factory strive towards developing and launching Decentralized exchange platforms and dApps that are beneficial to both businesses and users alike. All of our solutions are white-label to give your brand the utmost visibility in the crypto space. Our Decentralized protocol development services are equipped with smart contracts that have been audited to provide perfect automatic execution of services on your platform. We also offer a wide range of services. Some of them include DeFi lottery system development, decentralized fund management, DeFi yield farming platform development, DeFi token creation, and DeFi Smart contract development.
Reach out to us soon and partner with us so you can swiftly create and launch a Decentralized exchange like FalconSwap to instigate startling ROI into your business venture.
