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Last updated: Aug 14, 2023
Axial is an Avalanche-based value-pegged asset DEX with a focus on native Avalanche platforms. The protocol’s main benefit for users is that it provides liquidity between a variety of stable assets, including bridged and derivative assets, allowing seamless swapping with low fees and slippage as well as providing liquidity into Axial pools to earn swap fees and native tokens AXIAL.
Axial was launched in November of 2021 and it is one of the projects originating from the Snowball DAO. Snowball DAO is a community-driven venture DAO that combines multiple DeFi protocols and offers various financial services.
Axial Swapping service enables seamless trading between stablecoins, as well as other bridged, wrapped, or derivative assets with low fees.
Axial doesn’t use oracles in their smart contracts to define token prices. Since Axial contracts are forked from Saddle Finance, they follow the concepts used by Curve. Axial asset prices are managed through the ratios of each asset in a liquidity pool. In case of changes in token ratios, the arbitrage mechanism comes into play enabling the selling or buying of the assets at slight discounts or rewards, ultimately rebalancing the pool and returning the asset values to a normal condition.
Axial currently has four multi-asset liquidity pools and one meta pool. Such a multi-asset model addresses the issue of fragmented liquidity and ensures lower slippage on trades. Metapools allow a single coin to be pooled with all the coins in another base pool.
Users can also become liquidity providers by depositing their assets into Axial liquidity pools and earn rewards from swap fees. There is no need to deposit all the tokens listed in the liquidity pool, instead, users may provide any combination of tokens into any Axial pool. This means that for example in a pool of four tokens, a user may deposit all four in equal proportions or just one or two at any time.
In order to keep the balance of the pools, the platform incentivizes depositors to provide tokens of lower supply. Similarly, if a user withdraws a token with a higher supply relative to the other tokens in the pool, they will be given a discount. Users may also deposit their LP tokens into one of the Axial pools in order to continue earning rewards from swap fees, but also receive AXIAL tokens on top of that.
All swaps through Axial liquidity pools have a 0.04% fee, 75% of those Axial fees are shared amongst the pool's liquidity providers, while the remaining 25% goes to Axial's treasury. Axial charges no deposit or withdrawal fees.
As the first step to start using the Axial app, users need to connect a wallet. Axial wallet support includes Metamask, WalletConnect, and Coinbase wallet.
The front page of the app starts with Axial Swap, where users can trade tokens. Here users have to select the token to be swapped in the upper field and enter the token to be traded for in the second field. At this stage, Axial will show the swap rate, and the estimated price impact of the swap, based on fees, slippage, etc. Users can also adjust slippage through the advanced option. As the final step, it is necessary to approve the transaction by clicking ‘Swap’ and confirm it in the wallet.
To provide liquidity, it is necessary to navigate to the Liquidity tab. This page will display the full list of pools available. User needs to click the ‘Deposit’ button next to the pool of choice, select the amount of each token to be provided as liquidity and confirm the transaction. The bonus will be displayed at the bottom, in case the user provides liquidity of low supply in the pool.
In order to deposit LP tokens and receive AXIAL tokens as rewards, the user needs to navigate to the Rewards section at the top of the page, then click on ‘Deposit’ next to the pool they added liquidity in, select the amount of LP tokens to be deposited, deposit and confirm the transaction.
AXIAL is Axial's governance token with a maximum supply of 365,000,000. These tokens are being emitted on a per-second basis over a period of three years. 50% of AXIAL supply is used as incentives for liquidity providers, 20% is given to xSNOB holders (staked version of SNOB, the native token of Snowball), 15% goes to Axial treasury, and 15% to Snowball treasury.
AXIAL can be earned by providing liquidity to Axial's liquidity pools, as well as by participating in its governance through Snowball's staking of SNOB tokens. Currently, AXIAL can be provided as liquidity and for taking part in snapshot votes. The governance structure of the protocol is still under development.
Axial is claimed to be a fork of Saddle Finance, which has passed audits from Certik, Quantstamp, and OpenZepplin. Their audits can be found on the Saddle Finance page on DeFi Teller. The Axial DEX has not been individually audited yet.
Axial was launched by the Snowball team with their development, design, and marketing staff located in different parts of the world. The Snowball team remains anonymous.
Snowball’s co-founder names himself 8-Bit Giraffe and claims to have a bachelor's degree in marketing and a minor in psychology. The Snowball team will help Axial mature until it has its own independent team.
Axial’s partnerships revolve around Avalanche-based projects. It has recently integrated Firebird Finance, making Axial liquidity available on Firebird. Other recent partnerships include integrations with Yield Yak, which offers multiple stablecoin farming strategies for Axial’s stablecoin pools; Teddy Cash, bringing 1 million TEDDY tokens as rewards for liquidity providers in Axial’s AC4D pool; and Frax will bring $300,000 in FXS tokens as incentives for those providing liquidity in Axial’s AC4D pool.
Recently the company joined the OpenSwap Bridge Founders Program which will initially be introduced on the BNB Chain and Avalanache’s Fuji Testnet. The integration will make AXIAL accessible to liquidity sources from the rest of the networks OpenSwap supports.
According to the Axial roadmap, it is planned to introduce staking, namely the sAXIAL token, which will be the staked version of AXIAL providing voting power to users committed to lock their tokens, as well as veAXIAL, which will give boosted rewards from the liquidity pools. It is also planned to update User interface, introduce a more robust voting system, enable Decentralized Pool Creation, meaning that anyone will be able to create meta pools linked to the main liquidity pool and introduce Decentralized Rewards Allocations which will enable anyone to assign token rewards to any of Axial pools or meta pools.
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