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TitanSwap is a DeFi project that combines the features of the predecessor in the DeFi realm, wishing to provide new millennials and Z-generations with completely self-controlling financial products. With a small number of digital assets and little understanding of the complex on-chain transactions and advanced financial knowledge, users can participate in the project.
Ghughur, an aboriginal from TitanSwap, and one of the core developers of TitiaSwap, recently shared his insights on Swap and the future development of DeFi. Here is the record of Q&A:
Ghughur: After I joined TtianSwap, I picked myself this name, which comes from the book “The Ionans” by E.E. Buchanan. Ghughur is actually the Titanese Peoples of Titan, a wise, friendly, and extremely peaceful race.
I have been paying attention to Uniswap DEX since Devcon3. Compared with the order book model, it is a comprehensive innovation. It not only avoids many problems of execution efficiency on the chain, but is also anti-censorship, decentralized, and unauthorized. The non-custodial method retains the purest support for the spirit of the blockchain.
At that time, I was still in a company that was developing blockchain wallets, and I paid close attention to Dapps built on the blockchain. I also developed CEX products earlier, but I am more interested in decentralized protocols and applications transfer.
After the outbreak of DeFi, more people started to realize the importance of DEX, and consider it as the cornerstone of the DeFi Lego. I had the opportunity to join TitanSwap in the middle of the year, which is very consistent with the concept of decentralization and community governance. The team is also international and we can freely make suggestions for the future development of the project.
TITAN is a decentralized financial centre in light of Uniswap and other products. I really admire Uniswap’s innovation, but it does not mean that Uniswap is perfect. TITAN proposes many optimizations from the perspectives of both the trader and the liquidity provider, which can be simply understood as the advanced version of Uniswap.
From the perspective of traders, TitanSwap is committed to providing lower slippage, faster transaction speed, more comprehensive transaction data, richer order types, and cross-chain asset swaps, while not losing any DEX features on this basis.
From the perspective of liquidity providers, we are committed to minimizing the risk of impermanent losses, and on the basis of greatly reducing the technical threshold of market makers, enhancing the ability to resist risks and improving market efficiency.
In short, TitanSwap is a liquid mining DAO that supports multi-chain asset swaps.
Q&A
Q: Uniswap recently announced the launch of governance tokens, which triggered a strong response from the market. Major exchanges have launched their tokens one after another. Why does the issuance of Uniswap bring such a huge effect?
A: Uniswap’s issuance of governance tokens is completely within our expectations. The token incentive policy derived from Swap imitations put pressure on Uniswap, also, its own long-term development needs the support of a decentralized community, and token governance is the most appropriate way. This is also the value of TitanSwap, which defines TITAN DAO as the height of decentralized governance when it was founded.
Uniswap is undoubtedly the king of the Swap, as it started in an early period, and form the AMM mechanism, which is now the mainstream. Its daily transaction volume reaches 300 million to 400 million US dollars, and unlike CEX, every transaction on DEX is traceable on the chain, with no fraudulent transaction.
The trading volume of Coinbase Pro in the past 24 hours is 378,916,633 USD, so we can say that Uniswap has the strength to compete with some super-class exchange. This has also put tremendous pressure on many second-tier exchanges. With the further maturity of the market, the market size of the entire DEX will further expand. Titan has long-term development and layout in this track.
Two months after the launch of Uniswap, the trading volume surpassed Coinbase, the second largest decentralized exchange. In less than two years, Uniswap protocol has achieved: more than 20 billion U.S. dollars in trading volume, supporting 2,484 types of encrypted asset transactions, more than 250,000 unique addresses have obtained more than $1 billion in liquidity from more than 49,000 liquidity providers (LP), earning $56 million in fees in the process. These data fully illustrate Uniswap’s competitiveness in liquidity mining. Although the liquidity is divided, the transaction volume is still far ahead.
In addition, the wealth effect is the best marketing. Uniswap will provide 15% of the total UNI based on the September 1 to early Uniswap LP, users, SOCKS redemption and holding users. Ordinary users can receive 400 UNI, the highest value is as high as 10,000 yuan. The sensational effect of this behaviour is like giving out money for free, triggering great attention for the public.
Q: Uniswap started the first phase of mining at 20:00 on September 18th. Do you think it was an opportunity for ordinary users?
A: This question can be addressed from two perspectives.
First of all, Uniswap mining greatly reduces the technical threshold of market makers, and participating in mining itself is a way to participate in decentralized finance. At the same time, the risk of security vulnerabilities in its contracts is much lower than that of other liquid mining projects. From a perspective, I encourage users to participate in this decentralized revolution.
On the other hand, we have counted USDC-ETH trading pairs and found that the top 5 users have invested an average of more than 30,000 ETH and equivalent USDC, which is nearly 300 times the average of all liquidity users of the pool, and the top 100 users occupy a share of more than 99%.
For most ordinary users, there is no possibility of obtaining excess income from it. Considering the high GAS fees caused by Claim UNI tokens and Transfer tokens today, I am afraid that it is not meaningful to participate in it from a purely economic perspective.
Uniswap’s incentive mechanism has its own considerations, because as a DEX, its slippage is an important measurement indicator, and low slippage can attract more traders. The slippage in the AMM mechanism depends entirely on the amount of funds, so Uniswap’s great liquidity provider has taken a huge portion of its profits. As a brand-new Swap, TitanSwap does not have this historical burden. It will balance the relationship between large liquidity providers and ordinary liquidity providers when incentivizing. The amount of funds and the number of participating addresses are equally important to the platform.
From the time evolution of DeFi and the trend of DeFi concept tokens in the secondary market, currently, it is not the early dividend period of liquid mining. The market has experienced sufficient capital hype and emotional “hype”. Due to the speculative nature of liquidity mining, when the market is fully played, ordinary users who have no capital or information advantages do not have advantages.
Q: After Uniswap, a large number of swaps appeared on the liquid mining market. Compared with Uniswap, Justswap and other projects, what are the highlights of TitanSwap?
A: TitanSwap is Swap standing on the shoulders of Uniswap, but there are a lot of innovations.
TitanSwap aims to be a cross-chain Swap. Although Ethereum carries most of the digital assets, we believe that Swap should not only serve Ethereum. For users, they should not first convert ERC20 assets to ETH through Uniswap, and then convert them to TRX in another place, and finally convert to TRC20 tokens in JustSwap, as the entire operation process is too long and too cumbersome.
TitanSwap is a one-stop cross-chain asset swap. The entire process is automated through cross-chain assets, which greatly reduces the user’s operating costs and intermediate transaction costs.
As the first milestone, TitanSwap will first realize the automatic routing of different liquidity pools on Ethereum, such as Uniswap pool, Sushiswap pool, Balancer pool, Curve pool, and realize Swap across liquidity pools, and when different liquidity pools provide the same trading pairs, smart routing will also automatically select the best route to achieve the best price and lowest slippage. These are the two major features of TitanSwap Cross Chain and Smart Route.
Secondly, although TitanSwap is a Swap product, it does not mean that it can only be Swap.
Most users who are accustomed to centralized exchanges will use a variety of rich order types. There is a huge difference between the AMM mechanism under DEX and the order book model, which makes the implementation mechanism of limit orders completely different from CEX.
With the TitanSwap product launching the market recently, users can experience limit orders for the first time, entrust smart contracts to track prices and realize the function of limit orders, which not only guarantees the non-custodial features of DEX, but also realizes this unique function.
However, the limit order is only the beginning. Through a similar mechanism, users can entrust smart contracts to implement more abundant order types, and even the automatic arbitrage function between the same type of liquidity pool and cross-type liquidity pools. This is essentially a way to automate orders based on AMM through smart contracts.
In addition, TitanSwap will work on the mechanism of AMM, while innovating on the incentive mechanism. The goal is to reduce impermanence losses for liquidity providers, which we call Adaptive Bonding Curve. Specifically, the main reason for impermanence loss is price fluctuations, especially sharp fluctuations. TitanSwap tackles this problem from two aspects.
One is to dynamically adjust the curvature of the Bonding Curve to make the curve steeper when the price fluctuates sharply, thereby reducing the profit margin for arbitrage and returning the price to the normal price more quickly and at a lower cost. The dynamic adjustment depends on the Realized Variant on the one hand, and the prediction of fluctuations on the other hand, such as the way of VPIN. In the future, we will even use deep learning to intelligently adjust the curve.
On the other hand, TitanSwap’s Pool fee is not a fixed 0.3%, but can be determined based on the volatility of the trading pair. This process will also be implemented in a democratic manner through TITAN DAO.
In addition, TitanSwap is also actively exploring the implementation of Layer2. The technical route is consistent with Unipig’s technical route. This will undoubtedly greatly improve the user experience. It can be predicted that the first implementers will form a leading position in the market for a period of time.
There are some other micro innovations, such as TITAN Address Audit, which is not a centralized verification of scam coin, instead, it is more like a community-based reputation system. The reputation of trading tokens is formed through the list created by the community, and higher reputation forms wider spreading characteristics and greater user traffic support.
We are looking forward that the community can experience some other micro-innovations and then give us more suggestions.
Q: Liquidity mining has become the standard for token distribution of swap products. When will liquidity mining of TitanSwap start? What is the token economy?
A: TitanSwap’s early products do not include liquidity mining, but rather focusing on the trader experience so that the users can believe in the product itself. We will later focus on launching liquid mining based on the product.
TitanSwap liquidity mining will launch the market by the end of October, with some features as follows:
The first is to balance the relationship between large liquidity providers and ordinary liquidity providers, so that ordinary users can participate in our project fairly. On the other hand, Titan promises to release 90% of TITAN tokens through liquidity mining. The team has no pre-mining and no reservations. Only 10% of the tokens are sold to investors as initial capital, after which the Titan project becomes a true decentralized community project. This ratio is much higher than other Swap projects.
Q: If you look at the price of various swap tokens back and forth, you will find that many tokens have risen in the early stage, but the selling pressure brought by later mining is very serious. What do you think of this problem?
A: There is no doubt that many Swap only focus on motivates liquidity, with their products in lack of innovation and long-term planning, and therefore lack of long-term value support. For the project to form long-term value, the product itself must provide the functions that users desire. From this perspective, Internet products, industrial blockchain products, and DeFi products must all follow the same guidelines.
TitanSwap is trying to solve some problems exist in DEX, and hopes that more innovators will participate in it. On the basis of TitanSwap, TitanSwap will be completely open source and involve community developers to participate, thus forming long-term value and common interests.
From the perspective of the broader market, the collective decline in the market from September 2 to September 4 brought an end to the upward trend of DeFi. Bitcoin is currently in fluctuation, and the trend of mainstream currencies led by ETH is generally weak.
In the current trend of weak market volatility, SWAP currency is suffering as well. Recently, the major currencies related to DeFi, such as LINK and SUSHI, have seen a sharp decline. The trend of the secondary market also objectively shows that the current market sentiment is weakened.
At present, it seems that the price of various swaps will plummet in the later period mainly because of the lack of support brought by innovation like UNI. In addition, due to the design of the AMM token 2 pool, the opening price of the token is seriously inflated. AMM coin still needs more non-speculative use cases to be able to hold on.
Q: What are your views on the future development of DeFi? What will be the next hot spot or what will happen to decentralized exchanges in the future?
A: DeFi is still at a very early stage and many people tend to use the Gartner curve to describe the current stage of DeFi.
From the perspective of product, DeFi products still have many problems, such as high thresholds for users, compliance and regulatory issues, etc. The prosperity of DeFi depends on the further improvement of the entire industry infrastructure, such as the launch of ETH2.0, the participation of more institutional users, and the integration of privacy protection and the trusted computing environment. Under these conditions, DeFi can witness hundreds and thousands times of increase.
From the perspective of DEX, the improvement of transaction efficiency, the reduction of GAS fee, the avoiding of impermanent losses, and the further integration with decentralized derivatives, etc are the functions that TitanSwap is researching or developing.
In all, the future potential of DeFi is unlimited, and users must be bold yet cautious while participating in DeFi projects.
Currently, the media coverage are mainly about DeFi’s rising lock-up value, and increasing market value of the tokens and DEX trading volume etc, but rarely talks about the indicator of “user volume” growth, and has never used the term “killer app” to describe DeFi. This precisely reflects the current situation of DeFi: the threshold is too high, making it difficult to achieve user growth.
At present, the function of DeFi is only limited to a small number of speculators, and it is still too early to enter the mainstream financial world and the lives of ordinary people. I hope that all projects can work hard in this regard.
In addition, there is a huge gap between DeFi and centralized transactions in terms of user experience and efficiency. There may be two situations in the future: one is that the decentralized exchange may only be a supplement to the centralized exchange, and it is difficult to pose a threat to the centralized exchange; and the other situation will be DEX integrating more CEX functions in the future, just like TitanSwap.
NFT may be a new hot spot. Although DeFi’s innovation has created a lot of bubbles, it has also left a lot of infrastructure for the blockchain world. More trading derivatives will come into being. At the same time, with Eth2.0 and the development of second layer network, the current problems of congestion and excessive GAS fees will be properly resolved, providing users with a better interactive experience.
The specific projects of the next hot spot are difficult to predict, but they will definitely bring wealth effects and are highly speculative.
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