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Last updated: Aug 21, 2023
QuickSwap is an automated liquidity protocol working through a system of non-upgradeable smart contracts. Each of the contracts represents a token pair and is tasked with managing a liquidity pool consisting of reserves of two ERC-20 tokens. In exchange for providing liquidity on the platform, QuickSwap issues LP tokens representingthe user’s share in a liquidity pool which can be redeemed for the underlying assets at any time.
Since the mechanics behind automated market makers, or in QuickSwap’s case – trading pairs – consist of a simple formula aimed to keep the combined product value of the two tokens in the pair a constant, by balancing each of the token’s price despite the amount of tokens in it, the platform isn’t suitable for exchanging large amounts of assets at once. QuickSwap tries to counter this by adding all fees collected by a liquidity pool in it. When withdrawing their liquidity from a pool, users also withdraw the fees they have earned by acting as liquidity providers.
The smart contract system behind the platform can be divided into two categories – core and periphery. While the first group provides the fundamental functionalities of the project for any parties interacting with it, the periphery contracts only interact with other smart contracts and are not part of the core.
The core batch of smart contracts can be further split into a single factory contract and many pairs created and indexed by the factory contract itself. The QuickSwap team claims their smart contracts are designed to be minimal as having a smaller “surface area” makes them easier to reason with, more functionally elegant, and less bug-prone. Since the factory smart contract holds the generic bytecode responsible for powering token pairs, its main goal is the creation of a single smart contract per token pair. The created pairs then have two primary purposes – serving as automated market makers and keeping track of pool balances. Data from these smart contracts can be used by price oracles.
The periphery smart contracts support domain-specific interactions with the core and due to the permissionless nature of the QuickSwap protocol have no special privileges. A small example of possible periphery-like contracts provided by the team is the Library – providing functions for fetching data and pricing, and the Router which uses the library and fully supports front-end trading and liquidity management. It supports multi-pair trades and offers meta-transactions when removing liquidity.
In the v1 of the protocol which was forked from Uniswap, every token pair included ETH as one of its assets, essentially meaning that for each swap the protocol needed to exchange to or from ETH when facilitating a trade. However, in the v2 of the protocol, also forked from Uniswap, LPs can create any ERC-20 token pair.
There are three types of users taking part in the QuickSwap ecosystem – liquidity providers, traders, and developers. Liquidity providers are incentivized with rewards to contribute with digital assets supported by the platform, which facilitate for swaps being done by traders, which pay a fixed 0.3% QuickSwap fee for each trade. At the same time developers can create and deploy smart contracts integrated with QuickSwap to produce new trading interfaces and other cryptocurrency related products.
The platform can be used by passive liquidity providers interested in earning passive income on their savings by accumulating trading fees QuickSwap collects. Professional LPs focused on market making can develop custom tools and ways of tracking their positions across various DeFi projects. Besides that, the QuickSwap app can be used by projects wishing to provide a larger marketplace for their token by becoming an LP themselves. The company also states that its services can also be used by “DeFi pioneers” exploring complex liquidity provision interactions. Such are incentivized collective liquidity programs and using liquidity as collateral.
Traders on QuickSwap can use community-built tools and products to swap tokens using the company’s liquidity, besides that arbitrage bots can seek for profits by comparing prices on different platforms. In the latter case, bots help equalize prices across numerous automated market makers as they all use the same underlying mathematical formula, making interactions with them predictable. dApps can interact with the protocol by adding a swap functionality in their smart contracts which execute trades on the platform. In all cases, traders are subject to the same QuickSwap fees – a flat 0.3% on each transaction, 0.25% out of which are rewarded to LPs based on their share of the pool, and the rest is collected by the protocol to facilitate its operating costs.
QuickSwap has a functionality called flash swaps which allows its users to withdraw up to the full reserves of any token available on the platform to facilitate arbitrage opportunities. To do so, the user needs to either pay for the withdrawn assets with the corresponding pair tokens, or return the withdrawn tokens along with a fee. The platform’s interest in such a scenario is that the price of a token is more likely to remain “fair” the more people are looking for arbitrage opportunities, since they require capital that may not be otherwise accessible to everyone. A detailed guide on how to use this functionality can be found here.
At launch, QUICK’s total supply was 1 million but following a governance decision taken on March 23, 2022, the supply of the token will increase to 1 billion. The proposal was first published on Reddit, and states that this is only the first step from a 3-part plan to change the tokenomics of the coin. The motivation behind the proposal states that there is a psychological price threshold, or unit bias – a tendency to prefer to own more of a less scarce asset, therefore by lifting the total amount of tokens there will be a larger user base interested in obtaining it.
Although the total supply of the token will change, its initially allocated percentages will remain the same. 90% of it is distributed to liquidity mining programs, 5% was saved for liquidity mining programs on Uniswap, 3.25% was allocated to the creators and advisors of the platform and 1% was kept for a future airdrop. The funds to be distributed in liquidity mining programs are held by the treasury of the project in a multisig wallet that requires three out of four signatures. The current signature holders are Nick Mudge, Sameep Singhania, Roc Zacharias (LDA), and Sandeep Nailwal (Polygon).
The token’s use cases are governance and staking. To take part in the decision-making on the platform, QUICK holders can submit proposals and vote on such. The QuickSwap staking program, located at the Farms tab under the name Dragon’s Lair, issues 0.95 dQUICK tokens per every 1 QUICK deposited in it. The rewards can vary since they are based on trading fees of volume on QuickSwap. Detailed information on up-to-date return rates is available on the QuickSwap app.
Quickswap runs a program called “Dragon’s Syrup” that allows QUICK token stakers to earn extra rewards by staking dQUICK - the asset received when depositing QUICK into the staking smart contract, to earn extra tokens which are tradeable on the platform. There are various so-called syrup pools available on QuickSwap.
The QuickSwap team was created by co-founders Nick Mudge and Sameep Singhania. Nick Mudge has over six years of blockchain programming experience, and has participated in the creation of the ERC-721 standard. He is also the author of EIP-2535 Diamond Standard, as well as ERC-1538 and ERC-998. Sameep Singhania is co-founder and director of the blockchain development and consulting company Ginete Technologies. The company is advised by Lunar Digital Assets, a blockchain marketing and consultancy firm. Polygon is also providing support to the QuickSwap team, and has also granted a fund to enable the development of the platform, Polygon also participates in the governance of QuickSwap.
The company hasn’t shared any security audits, QuickSwap claims to be a fork of Uniswap “without a single line of code being changed” but with a different UI. And since Uniswap has been audited and hasn’t been subjected to an exploit or a hack, QuickSwap should be seen as just as safe. The QuickSwap team also warns that impermanent loss risks can occur as well as rug pulls, therefore users should invest with caution.
QuickSwap has established a partnership with Starter, an IDO (Initial DEX Offering) launchpad on Polygon which enables QUICK token holders to participate in launch events. There is also a partnership with Aave, granting QUICK rewards on its Polygon market. QuickSwap also collaborates with the cross-bridging protocol Relay Chain, and the multi-chain yield enhancement protocol Yield Enhancement Labs (YEL).
The recently published QuickSwap roadmap is focused on building QuickSwap’s so-called DragonFi Ecosystem on Polygon. The process starts with acquiring an exclusive licenze to utilize v3 software on Polygon as well as all Polygon-enabled chains in the future. Besides that, following another governance discussion, the team is working on implementing isolated lending and borrowing markets to increase the QuickSwap TVL by making it more useful.
QuickSwap also expressed intentions to support the Polygon ecosystem while increasing revenue to its own Dragon’s Liar, as well as the QuickSwap Foundation in order to secure more funds for the future growth of the project. Furthermore, the team is working or releasing educational materials regarding its syrup pools that will allow its users to learn more about the feature without having to leave the site.
The QuickSwap team is working on a feature called Build-A-Farm that will allow users to conduct their own liquidity bootstrapping pools natively on the platform. A decentralized leverage platform build on QuickSwap featuring a full range of trading tools, with no derivatives, fully settled on-chain with 100% underlying collateral, is also said to be released in the future.
The project also wants to become a central community point of the Polygon ecosystem for GameFi by launching a section of their website dedicated to Polygon games. Work is being done on UI and UX improvements including new dashboards, new charts and charing tools, and new analytics dashboards. The near future will also see the release of a host of LP management tools said to be of help in maximizing LP gains and making better trading strategy choices.
QuickSwap’s roadmap also shares plans on going multichain stating that before such plans go into action there will be a governance vote. The more distant future will also see the introduction of a veModel, bringing QuickSwap closer to being a full DAO whose Treasury is in full control of the community. The team also plans to introduce an NFT marketplace, to allow users to buy, sell, and trade NFTs.
https://snapshot.org/#/quickvote.eth
https://docs.quickswap.exchange/
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Last updated: Aug 21, 2023
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