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RSKSwap: On the Path Towards Solving Liquidity Problems on Decentralized Exchanges

Summary:
[Featured Content]RSK is a popular smart contract platform. It expands the existing functionalities of Bitcoin’s network by delivering greater scalability and the possibility to create, deploy, and import smart contracts on top of Bitcoin’s network. RSKSwap, created by the developer ecosystem, is another contribution to the DEX market, which has seen exponential growth all along 2020.Enter RskSwapRSK Swap is a class of decentralized exchange that allows users to swap various ERC-20 tokens instantly while charging them a fee of 0.3%. The protocol is intended to solve the liquidity problem of decentralized exchanges, and it comes with a few main benefits:It’s entirely decentralized, so no one has direct control.It is permissionless, meaning that anyone can use it.Anyone can verify the

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[Featured Content]

RSK is a popular smart contract platform. It expands the existing functionalities of Bitcoin’s network by delivering greater scalability and the possibility to create, deploy, and import smart contracts on top of Bitcoin’s network. RSKSwap, created by the developer ecosystem, is another contribution to the DEX market, which has seen exponential growth all along 2020.

Enter RskSwap

RSK Swap is a class of decentralized exchange that allows users to swap various ERC-20 tokens instantly while charging them a fee of 0.3%. The protocol is intended to solve the liquidity problem of decentralized exchanges, and it comes with a few main benefits:

  • It’s entirely decentralized, so no one has direct control.
  • It is permissionless, meaning that anyone can use it.
  • Anyone can verify the execution, making the protocol secure.
  • In addition, it’s censorship-resistant, which is an important quality at present times.
  • Additionally, much like Uniswap, there are no general restrictions for listing tokens.

Every single ERC20-based token has its very own smart contract and its liquidity pool, and if there’s none, it can be easily created. Once the token has its liquidity pool, anyone can contribute to it to earn the 0.3% fee that goes to the liquidity provider.

RSKSwap: On the Path Towards Solving Liquidity Problems on Decentralized Exchanges
RSK-Swap

A Fork of Uniswap V2

According to the official announcement, RskSwap is a fork of the popular Uniswap V2 Protocol. At the time of this writing, Uniswap remains the most widely used decentralized exchange on the Ethereum network.  More interestingly, Uniswap even launched its very own governance token called UNI.

When individuals stake their assets and become liquidity providers, they receive the fee reward in the native token of the pool they stake in. This has created some exciting opportunities for investors because speculation is known to drive the price of said tokens insanely high. Of course, this also brings the risks of impermanent loss when yield farming and needs to be considered very carefully.


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