cover_apyswap

What is APYSwap?

What is APYSwap? To answer that, let’s start with the problem. With the rapid development of the DeFi ecosystem, the current DeFi landscape faces several challenges in order for it to achieve perfect integration of traditional finance and cryptocurrencies. These problems include overly complex DeFi instruments for average users, difficulty for users to differentiate between various products, fast changes in the DeFi environment making it hard to maximise profits, and finally high transaction costs. These fundamental issues have been hindering the true potential of the DeFi ecosystem. 

The Solution

To resolve all these issues, APYSwap has been created to provide users with a marketplace for trading all financial assets. APYSwap will allow its users on various blockchains (Ethereum, Polkadot, Binance Smart Chain, and more in the future…) to create and control vaults on their native blockchain. The users will have the ability to enjoy financial services without the need of sacrificing ownership of their assets.

Let’s talk more about APYSwap…

There’s three main layers of APYSwap that you should know about. This includes the protocol and smart contracts, the layer 2 aggregation marketplace as well as the user wallet on the top layer. Through supporting various DeFi protocols, it will offer a simple yet effective user experience for choosing asset management options. The portfolio managers can even use the various tools to design an innovative fund structure and product offerings without needing to deal with smart contract programming. So le’s dive a little deeper with the tools available onboard…:

APYSwap Vault Contracts

The vault is a smart contract that will manage access to funds and functionalities to other blockchain agents dependent on the shares of ownership of the vault. APYSwap Vaults can interact with any trustless services on Ethereum, Polkadot, and Binance Smart Chain networks that take their governance from a specific address; they can partake in governance and other functions. 

Image taken from APYSwap Whitepaper.

Layer 2 Bridge and Token Swap

In order to minimize the Ethereum gas costs and block congestion. The users can utilize Polkadot, Binance Smart Chain, or Chromia blockchains as a Layer 2 network to transfer or trade shares in APYSwap Vaults, with all assets anchored in the Ethereum network.

Layer 2 APYSwap Vault Marketplace

The APYSwap Marketplace is a place where all the different portfolio trading will happen. It is built for users to trade their shares of APYSwap Vaults which will contain a mixture of LP, YF, and various other tokens on the Ethereum blockchain. The process will contain no friction, intermediaries, or costly Ethereum gas fees. This is done through smart contracts, a regular backend and web application enabling users to trade shares in APYSwap Vaults.

APY Mask

The APY Mask is a Metamask-style web wallet that will interact with DeFi apps via APYSwap Vaults. Users can interact using this interface with various functions offered by APYVaults (creating and managing Vaults, and transferring their ownership, etc…).  So with APYMask, the users will have the opportunity to manage and sign APYSwap Vault transactions utilizing the Layer 2 Chromia accounts, using a familiar Metamask-style interface.

Image taken from APYSwap Whitepaper.

Portfolio Rebalancer

The Portfolio Rebalancer is an on-chain or hybrid solution that will allow users to delegate control of their shares to the rebalancing contract. The users can choose a rebalancing strategy fitting to them and then allow them to manage their portfolio automatically on their behalf.

Governance Layer

The governance layer is a set of smart contracts and accompanying WEB UI for users to govern protocol changes. The layer will include key components like voting on issues, adding new services, whitelisting or blacklisting supported DeFi projects, etc. The users can also login via APY Mask and vote with their APY token balance.

So how exactly does APYSwap achieve all this?

As mentioned earlier, APYSwap has cross-chain composability. This means that the platform has cross-chain support for Ethereum, Polkadot, and Binance Smart Chain. The platform will also look to support public blockchains and DeFi applications in the future. The cross-chain support for Ethereum and Binance Smart Chain happens through layer 2 protocols as a bridge. Once they generate different vaults, they’ll list on the layer 2 marketplace for trading. Then they can register on the initial public chain. As for Polkadot, with more parachains that are supporting smart contracts. The platform can use virtual machines that are compatible with Ethereum-based smart contracts and then connect with the Polkadot ecosystem. Due to the fact that most assets issue on Ethereum, the team behind APYSwap believes that the current method is the most effective way of ensuring performance and cost.

Image taken from APYSwap Whitepaper.

What are the use cases of APYSwap?

APYSwap is targeted towards two groups of users, experienced crypto traders that wish to create portfolio and crypto asset holders that can purchase portfolios and receive passive income. Not only can users utilize APYSwap to manage a wide variety of products, they can also participate in the governance process through evaluating proposals and voting. Apart from governance, APYSwap also provides users with financial product issuance, delegated asset management, and delegated governance. The platform provides a plethora of options for users to best maximize their experience with cryptocurrencies and blockchain.

The APY Token…

A total of 100,000,000 APYSwap tokens will be available. The APYSwap token’s use will be as the main governance token of the APYSwap ecosystem. So projects that have an interest in being traded on the platform are incentivised to acquire APY tokens to be whitelisted. The idea of being whitelisted on APYSwap means that portfolio managers are able to add LP/YF tokens onto APYSwap’s Vaults. Apart from whitelisting, the token also has insurance capabilities for token holders, fee reduction opportunities and governance control.

Insurance Pool

The insurance pool will help ensure that only reputable DeFi projects are available on the marketplace. They create an initial whitelist via the development team, and afterwards the decentralized community will have full control. So if a project falls below expected standards, the tokens locked in the insurance pool will be distributed to all participants who own part of its LP tokens in APYSwap Vaults. The projects will also stake tokens to propose themselves for inclusion in the whitelist, with token holders voting on the proposals. The process will also be re-evaluated periodically, with projects delisted if there is a lack of community support.

Fee Reduction

They charge fees upon the withdrawal from the APYSwap Vaults. The fees are set by the community. You can utilize APYSwap tokens to pay lower fees to portfolio managers of APYSwap Vaults. They use oracles within the APYSwap ecosystem to help determine the current prices of shares of the APYSwap Vault as well as the pool of assets within them. Furthermore the oracles can receive a fee in APY tokens as a reward for honest report and users can turn staking their tokens to vote for honest oracle selection. 

Governance

Now let’s move to governance. When a user votes, the value of a token’s vote will be determined not by its numerical weight. But also by the historic voting activity of the owner and the length it has been held by the owner. This will help incentivise users to participate in voting regularly and also reward the most active members of the community. And to incentivise long-term participation, long-term holders will be given greater voting power. 

Roadmap

Image taken from APYSwap.com.

Conclusion

With the crazy bloom of DeFi platforms, it is hard to navigate without a powerful interface. By having APYSwap, users can interact freely with any DeFi application that they deem suitable and do so in a much more efficient and cheaper way! If you would like to learn more about, feel free to check them out below!

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