Gate.io Launches Improved DEX Swap Protocol With Low Slip And High Liquidity
Digital asset exchange Gate.io announced the launch of an updated version of the protocol dubbed HipoSwap which offers low slippage and high liquidity. In August 2020, GateChain, Gate.io’s public channel, went live. The GateChain-based “HipoDeFi” DeFi platform was also built. The company announced that the updated HipoSwap protocol now features an innovative “maker pool” model for the decentralized financial space.
DEX developments in HipoSwap
Compared with the traditional order book model, the AMM mechanism has the advantages of automation, low cost and efficiency. Nonetheless, it also presents specific challenges around pricing, non-permanent losses, slips, and more, which are the issues that DEX builders and their products have been trying to optimize for some time. Therefore, two flaws of DEXs using a constant market maker are the impermanent loss and the high cost of price slippage. The HipoSwap protocol has been updated to address these two challenges.
In September 2020, HipoSwap’s white paper proposed an automated market maker exchange protocol. Based on the CPMM, a few pools of single currency market makers have been introduced to enable policymakers to place orders in the market, collect fees, improve liquidity in the market and effectively reduce slippage. lessee’s price.
Update DEX with Creation Pools
By introducing manufacturer pools, HipoSwap aims to reduce transaction costs for decision makers regardless of the ups and downs of the market. With manufacturer pools, liquidity providers can deposit a single token in a custom price range higher or lower than the current price. If the market price enters their specified range, they sell one asset for another while earning swap fees in the process.
“Innovation is a key skill for any DEX to move forward. The market is full of DEX products with revolutionary potential, and the dominant AMM model is constantly being redefined. As the DeFi boom continues, the rise of a new DEX system is expected, which continually innovates the overall AMM mechanism. HipoSwap and its pool of manufacturers are bringing a new solution to the market, ”said Marie Tatibouet, Marketing Director of Gate.io.
How is HipoSwap unique?
When HipoSwap’s maker pool is fully funded, taker slippage can be reduced by a factor of 1 / n, where “n” is the leverage used in trading. For example, if the leverage is set at 10, we can reduce the slippage to 1/10 of what it would have been if they had simply traded with the CPMM LP pool.
Slip Reduction: Users with high trading volume who are in no rush to close immediately can provide liquidity to the market through manufacturer access while effectively reducing slippage for themselves and earning taker fees in the process.
A smoother trading curve: only a tiny fraction of the assets are traded in the LP pool, and the majority of them are traded in the maker pool.
Reduction of gas costs: the HipoSwap protocol is very simple and consumes less gas. In addition, one can customize the protocol to set transaction fees for the liquidity pool, with rates below 0.17%.
“HipoSwap made a disruptive model in the decentralized space, using the maker model, which is undoubtedly ahead of the rest of the protocols for decentralized exchange. This open source and advanced DEX solution solves the problems of high slippage costs and low liquidity facing the industry, ”added Tatibouet.
Constant innovation is the name of the game
For greater adoption of decentralized exchanges, reducing the overall slippage is essential. Reducing slippage promotes price stability; the reduction of non-permanent losses leads to a price change; and optimization on one side may have consequences for the other. For an AMM type DEX, impermanent loss and slippage can also be seen as part of the automated market maker, constantly being adjusted and improved. HipoSwap’s introduction of manufacturer pools will play an important role in the evolution of the DEX space.
Gate.io empowers a new generation of global traders with the tools to enter the revolutionary era of cryptocurrencies. The “Gate ecosystem” includes Gate.io, Wallet.io, HipoDeFi and GateChain. Gate.io enables blockchain enthusiasts to exchange and store assets in over 470 of the major cryptocurrencies for over 4 million users from over 150 countries. It is a one-stop-shop for spot, margin, futures, perpetual, staking, C2C loans, options and DeFi trading. At Gate.io, we strive to provide a fast, easy to use, and welcoming platform for everyone. Discover us on Twitter and Youtube for cool updates, reward campaigns and more. Gate.io ranks in the Top 3 in the ranking of major cryptocurrency exchanges by trust score (spot) by CoinGecko (at time of writing).
Diksha Sharma, Communications Manager
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