Liquidity challenges of Early-Stage Cryptocurrency Projects

Currently, cash is the most liquid asset you can hold. For example, if a transaction of one million dollars takes place, the market is able to absorb the transaction easily without the value of the dollar drastically changing. Costs associated with the transaction, and the value of the currency at the time of the transaction, are also known beforehand. However, the same transaction with Bitcoin, Ethereum or any other cryptocurrency, has a much greater effect on the cryptocurrency’s value. This is because of the market’s lack of liquidity. The amount of cryptocurrency available on a specific trading platform can be exhausted, requiring the buyer to complete the transaction at a higher cost – about one to ten per cent more expensive than anticipated.

Liquidity refers to the extent to which a market allows assets to be bought and sold at stable prices. Lower liquidity tends to result in a more volatile market (especially when large orders are placed) and it causes prices to change more drastically, whereas higher liquidity creates a less volatile market and prices do not fluctuate as significantly.
Centralised exchanges are easy to use. However, as many have failed to adequately secure their customers funds, decentralised exchanges are becoming a popular concept. While some centralised exchanges are more secure than others, there are still a number of security failures. Decentralised trading platforms offer an alternative and perhaps even more valuable service by promising better security and transparency. They do not rely on third party services to hold customers funds, instead peer-to-peer transactions are possible through an automated process. Decentralised exchanges can also provide more privacy for users.

Unfortunately, decentralised exchanges still lack in some aspects such as: ease of use and support from users (which is required to attract a mainstream user-base) due to lack of liquidity. The liquidity pool and market depth of most decentralised exchanges are very low. Liquidity pools enable users to buy and sell crypto on decentralised and other DeFi platforms without the need for centralised market makers. A liquidity pool is a crowd-sourced pool of cryptocurrencies or tokens locked in a smart contract that is used to facilitate trades between the assets on a decentralised exchange (DEX).

Recently, there has been a noticeable and consistent growth and popularity for Decentralized Finance (DeFi) platforms. As a result, Blockchain cryptocurrency start-ups need to bootstrap liquidity in order to ensure profitable trading prices on DEXs and other AMM-based platforms. This has necessitated the rising demand for decentralized, integrated; cross-chain ecosystems that can enable project owners to easily and securely conduct prelisting liquidity auctions.

Overview of Blockchain Protocols

Blockchain protocols are critical components of a blockchain-based Decentralised Ledger Technologies (DLT) that facilitate information sharing and dictate processes such as transaction validation, system security, the interaction of participating nodes, etc. Basically, in broader terms, protocols are rules that define the terms of engagement in the computing world.

Layer one protocol, which is sometimes called an implementation layer, refers to a system associated with the base or main architecture of a blockchain network. A layer one network sets the entire networks rules and parameters such as consensus algorithm block time transaction throughput, etc. For example, the layer one protocol for Bitcoin employs a proof-of-work (PoW) consensus algorithm.

Layer two scaling solutions prepare the ground for proliferation of DApps by preventing the limitations of layer one protocols from being carried over to layer three protocols.

Layer three protocols, commonly known as application layers consist of protocols that allow applications to run as blockchains as well as the applications themselves. Layer three protocols can be split into major sub-layers – application and execution, depending on a given DApp’s use case. Layer three applications ultimately create real-world use cases for blockchains, making them very important. An example of layer three DEX is Uniswap. Uniswap uses an Automated Market Maker (AMM) framework to provide liquidity. Swapult, like Uniswap, is a layer-3 swapping protocol.

Swapult: Solution to Liquidity Problems Experienced in Early-Stage Cryptocurency Projects

Decentralised Finance is becoming popular in the cryptocurrrency space. As a result, cryptocurrency innovators are on the lookout for a decentralised and censorship-resistant way of fundraising. This has led to the emergence of Initial DeFi Offering (IDO) and Initial Liquidity Offering (ILO). With the advent of Automated Market Makers (AMM), tokens liquidity has become an important determinant of its market price. While markets are becoming more competitive and value oriented, early stage innovators are facing serious challenges due to these fast-paced changes. Prior to listing the token, project owners have to look for liquidity investments for their tokens. On the other hand, however, the situation offers new opportunities for early stage investors, facilitating higher and safer returns through mining liquidity.
Swapult is a layer-3 swapping protocol that aims at utilising decentralised innovation to connect early stage cryptocurrency project owners and investors. The unity of the two allows project owners to launch and manage liquidity auctions that are easy for investors to find on the platform.

Swapult have started a long mission to disrupt and fully decentralise liquidity auctions. Swapult’s vision is to facilitate greater interoperability through cross-chain interactions, which in-turn, will further strengthen the adoption and value of DeFi industry.

There are two categories of Swapult users:

1. Project Owners (PO) or Pool Creators
2. Investors or Liquidity Providers (LP)

Two types of pools are available on the Platform, namely: Direct Sale Pools and Time Locked Pools. Direct Sale Pools (DSP) are pools that don’t have any lock-in period where investors receive token immediately after the swap, while Time-Locked Pools (TLP) are those pools that have planned lock-in period and investors receive their swapped tokens only after the completion of the duration. Smart contract on Swapult platform will also enable pool creators to define custom lock-in periods, thus releasing the swapped assets bit by bit.

Swapult Platform: Pool Status at any Given Time

Created: Pool is exclusively available for SWAPULT token holders.
Open: Pool is available for all Swapult users.
Out of Stock: Predefined supply of auctioning tokens has been sold-out, but the pool’s duration has not ended. In the case of TLP, tokens will be locked for the remaining duration.
Finished: Pool has reached the end of its stipulated duration. Both for DSP and TLP, the leftover tokens are returned to the PO’s wallet at this point. Investors, on the other hand, get their tokens purchased (swapped) through TLP.
Closed: Pool is complete and tokens have been duly disbursed.

Access by Project Owner

On getting to the platform, the project owners will perform the following activities:
• Select the blockchain protocol relevant to their project,
• Select a cryptocurrency wallet.
• Initiate pool by clicking on the Create a Pool button
• Specify Parameters
• Click on ‘Start’ button to register the pool (the action will initiate transactions on the chosen wallet)
• Payment of Fees (two categories of fees, to be paid by Project owners – the fees will pay used for the development and maintenance of the platform)

Access by Liquidity Provider or Investor

Liquidity providers or LPs will be able to browse all pools hosted on the Swapult platform (which has a marketplace-like UI, platform) —past, ongoing, and upcoming. Liquidity Providers will have preliminary access to the following information about the pools:
Opening Time: when the pool becomes available. If the LP isn't an eligible SWAPULT owner, an on-screen message will specify the time when the pool becomes available for non-SWAPULT holders.
Closing Time: the end-time for the pool’s duration.
Time Left: remaining time available.
Token Name: the name of the auctioning token, as specified by the PO.
Payment Method: ETH/DAI or both, as specified by the PO.
Swapping Ratio: conversion rate specified by the PO.
Status: the present status of the pool.

Steps to Access the Platform by Liquidity Providers

Select supported block chain and wallet: LP have the choice to choose their preferred blockchain network and wallet
Join the chosen auction: LP can click the ‘Join’ button for their chosen pool. They need to input either the amount of auctioning tokens that they want to buy or how much ETH/DAI they want to invest. Swapult’s algorithm will automatically calculate the corresponding values based on the pool’s data. They will also receive a disclaimer informing the risks associated with investments, which he/she can accept or deny.

$SWAPULT is the native token for the SWAPULT ecosystem. The token is built on Binance Smart Chain (BEP20). The token and will be used for incentivization, governance, project development, and token burns. For investors and liquidity providers, holding SWAPULT token makes them eligible for a range of use-cases.

Benefits of using Swapult Platform

Rewards for Liquidity Providers: Liquidity providers get swapping rewards for participating on the Swapult network, in proportion to their contribution and the total liquidity deposited over the current week. Swapping rewards on the platform will be calculated and disbursed every 4 hour and in weekly cycles. However, this can be altered by governance in the future.

Discount for Token Holders: There are special discounts for SWAPULT token holders, thus enhancing the possible returns for liquidity miners.

Governance (Swapult Token Holders): The Swapult platform will implement a regular Proof of Stake (PoS) consensus mechanism, enabling SWAPULT holders to gain voting rights by staking their tokens is designated wallets. In general, the mechanism will involve limited-period staking, to be defined in details at the time of the platform’s governance launch.

Cross-Chain Movement: Swapult will simplify buying and moving tokens between blockchains. Swapult is a cross-chain liquidity manager for token pools and auctions powered by decentralized, infrastructure. Cross-chain movement is the movement of tokens with different blockchains. Swapult platform is distinctive compact platform with unique capabilities.

Passive Income by Staking: SWAPULT token holders will be able to generate annual passive income from their SWAPULT tokens, by staking them in specific BEP20 wallets. As an incentive, SWAPULT holders will gain staking rewards.

Safe and reliable Platform: Swapult is designed to be robust and safe. In order to overcome certain problems associated with DeFi platforms such as poor response, poorly written smart contracts, etc. that challenges DEFI’s potential of being temper proof, Swapult have used React Native to build responsive Swapult UI.

Potential to Grow (Burning Mechanism): Swapult adopts a Limited Top Value Burn policy and will use 16.667% of its daily earnings to market buy SWAPULT for token burning, with an upper limit of 20% of the total SWAPULT supply.

Community Support (Token Reserve): This reserve tokens are allocated for future initiatives and to support the community, marketing, exchanges fees ,and long term liquidity.

Tokenomics

Token Name: SWAPULT
Token Ticker: SWAPT
Total Supply: 5,000,000
Circulation Supply on TGE: 640,413 (12.80%)
Initial Market Cap: $448, 289

Token Sale

Pre-Seed: 100,000 SWAPULT at $0.35. 3 months lock, then 8.33% monthly.
Strategic Round: 400,000 SWAPULT at $0.455. 10% on TGE, then 9% monthly.
Private Sale 1: 700,000 SWAPULT at $0.47775. 20% on TGE, then 20% monthly.
Private Sale 2: 900,000 SWAPULT at $0.50050. 25% on TGE, then 25% monthly.
Auction Pools: 100,000 SWAPULT at $0.7. No lockup
Listing Price: TBD

Token Allocation and Circulation

Private & Public Sale: Swapult will allocate 2,200,000 SWAPULT (44%) for private and public sales. (Swapult pre-seed round and the strategic round have been concluded).
Swapping Rewards: (16%) Total supply, 800,000 SWAPULT tokens will be allocated as swapping rewards for liquidity providers participating in pools listed on the platform.
Staking Rewards: (16%) 800,000 SWAPULT will be allocated as staking rewards, to be circulated in the form of Average Annual Yields (AYY) SWAPULT holders who stake their tokens in a compatible staking wallet.
Reserve: 600,000 SWAPULT (12%) this reserve tokens are allocated for future initiatives and to support the community ,and long term liquidity. Monthly vesting, over 24 months
Team & Advisors: 500,000 SWAPULT (10%) will be allocated for incentivizing the Swapult team and its advisors. The team’s allocation will be disbursed over 6 months of equal vesting, after a lock-in period of 1 year. Advisors will receive their allocation similarly, but after 6 months of lock-in.
Liquidity Fund: 100,000 SWAPULT (2%) will be allocated for providing liquidity on Uniswap and other exchanges after listing.

RoadMap

Q4 2021 Kick-off

Development kick-off
Seed sale completed
Testnet is online
Code publish on Github

Q4 2021 - Q1 2022 MVP

Private sale
Permissionless listing
First pool on Swapult

Q1 2022 Accelerating

Cross-chain swaps
Governance & Staking
Stablecoin support
Bid auction

Q2-Q4 2022 DAO

Swapult Platfrom v2.0 Launch of the full working DAO

Conclusion

Swapult is a decentralized layer-3 swapping protocol that closes the gap between project owners and investors, providing an option for instant liquidity to early-stage promising projects while offering investors access to exclusive swap pools.

Swapult makes decentralized fund raising an equal access opportunity for all. Summarily, Swapult protocol is the number one platform that will unlock full potential of DeFi system using a decentralized cross chain synthetics and bridges. Swapult is a cross-chain liquidity management platform based on DeFi infrastructure for token pools and auctions. The compact platform deals on unique investing, staking, lending, and exchange of cryptocurrencies.

Swapult protocol is a unique platform created to provide fast, smart, accessible, and easy stage liquidity bootstrapping for all its users. Automated operated markets are all in Swapult protocol. Users can make use of the platform products to earn $SWAPT token and also use token as legal tender in digital markets. Swapult protocol has also introduced an off-chain order ledger to enhance liquidity.

Since it runs as a DeFi platform, it has no governmental influence. The platform operations are decided by an independent board, by voting on ideas by the members. Swapult is an innovative DeFi platform designed to benefit the community.

For more information about Swapult, please visit the following sites:

Website: https://swapult.com/
Twitter: https://twitter.com/swapult
Telegram: https://t.me/swapult
Whitepaper: https://swapult.com/whitepaper.pdf
Discord: https://discord.gg/aG2XA2htyg

Author’s Information:

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Participated Campaign: Article
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E-mail: [email protected]