QUICKSWAP — My Favourite AMM DEX
There is so much talk about Quickswap and lots of newbies have written to ask why I tweet about them all the time. This article will go to explain in simple terms why I fell in love with the Quickswap AMM DEX. First of all, we need to know what QuickSwap is.
Quickswap is an Automated Market Maker (AMM) DEX that is built on the Polygon (previously MATIC) network. With decentralised exchanges (DEXs), you’re looking at protocols that would allow users to trade cryptocurrencies with one another without having to deal with brokers. All they have to do is connect their cryptocurrency wallets to the DEX, choose the trading pair they want, attach the value to be traded and swap with ease. Centralized exchanges don’t work that way. You have to send your funds to the exchange and allow the exchange to find you a buyer or seller (depending on what you want to do) who you can trade with at a specific price. It becomes a problem when you can’t find a buyer willing to do so at that price. Automated Market Makers work on the concept of liquidity pools. Here you don’t have to wait for a buyer who wants the exact opposite of the trade you’re trying to carry out. The AMM DEX sorts it out for you with the liquidity pools and you’d have control over your wallet. For the first case, let’s say User A wants to trade his USDT for PBR on a centralized exchange at a certain price, the exchange finds a User B who wants to do the exact same transaction in the opposite direction at the same price. The exchange then acts like a middleman. With the AMM DEX, a liquidity pool is formed for various pairs. Let’s say there’s need for the $USDT — $PBR pair on an AMM DEX. Liquidity providers would then provide liquidity giving equal amounts of their USDT and PBR to the AMM to form a pool with USDT and PBR. The liquidity providers get rewarded for this. Let’s say User A wants to trade his USDT for PBR. He would connect his noncustodial wallet to the AMM and initiate the trade. The AMM then takes his USDT to the USDT/PBR pool and exchanges it for PBR. It’s automatic.
There’s talk about fees and throughput on Ethereum. That’s where Polygon (previously MATIC comes in). Combining Proof-of-Stake (PoS) with Plasma, they’re creating an ecosystem where developers can easily build and deploy Ethereum-compatible decentralized applications (dApps) that have scalability attributes especially as the industry expands. We know for sure that Ethereum is the most secure and programmable blockchain in the world. Polygon is stepping in to reduce the load on the network by removing some of the computational functionalities from Ethereum. Developers can easily build flexible, scalable and sovereign blockchain networks that are customized to their needs and derived from the Ethereum blockchain while maintaining the interoperability and robustness of Ethereum.
Why Quickswap DEX?
There are some reasons why Quickswap is seen as a top AMM DEX. These are the low gas fees, high transaction throughput and also the yield farms available on the DEX.
Low fee transactions
Talk about rude awakenings! I had one right at the start of my blockchain and crypto journey. Was it the technicalities? Not at all. It was gas fees. I had just received an airdrop of an ERC-20 token and it was sent to my wallet. Big money, I screamed but then came the time for me to sell, I screamed even harder albeit for different reasons. The gas fees were enormous. You might ask what gas means. Gas fees are like payments users make for transactions carried out on blockchain. To make a trade, you pay fees. These fees are quite huge on the Ethereum blockchain and sometimes have a bigger value than what you’re trying to trade.
The transaction fees on Quickswap are very low when compared to the equivalent and the Ethereum blockchain. The benefits of this cannot be overemphasized . This will greatly reduce the trade barrier for users within the space, greatly enhancing how they try out features, make trades, and mint NFTs among others. With Quickswap, you are getting pretty much covered on the fee front.
High transaction throughput
No one wants to spend days waiting for a transaction to go through. The speed of transactions is very important. You know how annoying it is when youre trying to log in to your mail and it’s taking time. In gaming, you would even get to appreciate transaction speed even more. With lags, you can lose a lot. The higher the transaction speed is, the better the customer fees satisfied, enhancing system availability and faster process. Most times these lags come as a result of overload in the network. That’s where Polygon comes in. Normally, everything about the transactions happen on the Ethereum (main) chain. Polygon tries to remove some of these loads from the main chain so as to ensure that there are fewer activities there. Some of the computational functionalities are removed from the main chain and taken to the side chain (layer 2). This makes Polygon very fast with it being able to get more than 60,000 transactions per block. Quickswap is leveraging ok the Polygon layer 2 framework to give high speed and high throughput transactions to users, thus enhancing their Blockchain experience
Yield farms are very common these days. Everyone is looking for passive income and yield farms present a great opportunity to do so. On Quickswap, you have two ways to earn sweet rewards. There’s so much you can do with the Quickswap token, $QUICK.
These are the Liquidity mining pools and the Dragon Syrup pools. We’d go through them briefly
Dragon Syrup Pool
The Dragon Syrup pool is a very good avenue to do earn on the Quickswap Exchange Platform. Here you can earn rewards in various registered tokens by staking $dQUICK. You might ask how we get the $dQUICK token. $dQUICK is also known as the Dragon $QUICK. You can get it by depositing QUICK into the QuickSwap “Dragon’s Lair” pool and receiving the $dQUICK token as rewards. The $dQuick token is rewarded to users to incentivize borrowing and lending. You can then stake $dQUICK on the Quickswap platform for rewards in various tokens like $ORARE, $AWX and $ATLX amongst others.
Liquidity Mining Pool
This is a little different from the Dragon Syrup pool. Here users get rewarded for providing liquidity for different liquidity pools on Quickswap. Remember that liquidity pools are the basis of how Automated Market Maker models work. The rewards you receive are in $QUICK.
It’s really beautiful to when you come to embrace the QuickSwap AMM DEX.