Paraswap emerged as a prominent project recently airdropping more than 8,400 PSP, which at the time of writing has a value of approximately $12K.
So, what is Paraswap? How does the project work? Let’s find out in this article!
What is Paraswap?
Paraswap is a DEX Aggregator, similar to 1inch or 0x Matcha. In short, Paraswap uses a search engine to find the best trading rate on multiple DEXs, which provides users with the least trading cost and the most value possible.
It is imperative to understand that, DEX Aggregators like Paraswap do not necessarily own any liquidity pool. Instead, they use liquidity from other AMM DEXs and charge a small amount of fee, or any slippage caused afterwards.
However, Paraswap currently operates with no fee. In addition, only 50% of any occurring slippage will be collected by Paraswap, while the other half will be distributed back to users. This will offer the best benefit for users.
What is Paraswap Token (PSP)?
PSP is the native token of Paraswap, which is used to increase the decentralization and efficiency of the protocol. About 20,000 users received the airdrop of Paraswap tokens, which are worth more than $240M at the moment.
How does Paraswap work?
Just like any other DEX Aggregator, the way Paraswap works is pretty similar. A trading process happens as below:
Step 1: User sets the amount of token that they want to trade.
Step 2: Paraswap finds the best trading rate across all supported DEXs.
Step 3: Paraswap then provides the user with detailed information and all trading routes.
Step 4: User selects the most suitable one and starts conducting the transaction.
Step 5: The swap is then executed and the corresponding tokens will be sent to the user.
In order to achieve the best price, Paraswap implements a variety of ways, such as:
Optimize Orders' Execution: Paraswap may split your transaction into multiple orders on multiple DEXs. For example, if you want to swap from 500 ETH to DAI, your swap transaction will be divided into 4 parts:
- ParaSwapPool (50%).
- Kyber (22%).
- SushiSwap (18%).
- UniswapV2 (10%).
Additional transaction: Sometimes, trading directly is not the best option. For example, if you want to swap from sUSD to ETH, the route sUSD ⇒ ETH is actually not the optimal setup, but actually the route sUSD ⇒ USDT/DAI ⇒ ETH is.
Gas Optimizations: Paraswap takes the gas fee into account when finding a trading path, which is reduced by implementing multiple solutions, such as implementing the GST2 Gas Token (enabling the tokenization of gas when prices are low).
Streamlined Allow Transactions: By approving a token on Paraswap, you can swap it on every DEX supported by the protocol. There is no need to go through this process numerous times.
Detailed information about PSP Token
PSP Price Today
Currently, you can track the price of PSP on Coin98 Markets.
Coin98 Markets is a website that helps users to get updates of the real-time prices, as well as view the detailed information of a Token Metric from any project. More specifically, you can access the home page or the community page of a project, or filter the coins/tokens by Market Cap, Trading Volume, etc.
PSP Key Metrics
- Name: Paraswap.
- Ticker: PSP.
- Token standard: ERC-20.
- Token type: Governance, Utility.
- Max supply: 82,516,200 PSP.
- Circulating Supply: 2,000,000,000 PSP.
- Contract address: 0xcAfE001067cDEF266AfB7Eb5A286dCFD277f3dE5
PSP Token Allocation
- Ecosystem: 51%
- Core Team: 17.6%
- Seed Investors: 14%
- Reserves: 10%
- Future Team Member: 5%
- Pre-seed Investors & Advisors: 2.4%
PSP Token Sale
PSP Token Release Schedule
PSP Token Use Cases
Currently, the PSP token has 2 use cases:
- Governance: PSP token holders can participate in governance activities.
- Staking: Users can also receive an auto compounding PSP APY.
How to get PSP Token
You can get PSP through various options:
- CEXs: Gate, MEXC,...
- DEXs: Uniswap, Sushiswap,...
- Staking on Paraswap.
How to buy PSP Token
How to store PSP Token
You can store the EFI token on Coin98 Wallet follow these step below:
Step 1: Open Coin98 Wallet & click Receive on the home screen.
Step 2: Search PSP Token.
Step 3: Click on the correct result, copy the wallet address and send PSP to this address.
No official future roadmap from the project has been released. Some changes made in the past are:
- 20/3/2021 - Import tokens with the URL.
- 17/3/2021 - Another interface for ParaSwap on mobile with MetaMask.
- 10/3/2021 - Custom Token Support.
- 5/3/2021 - Gas sponsoring for large trades.
- 30/1/2021 - ParaSwap v3 Insurance Policy.
- 28/1/2021 - ParaSwap v3 Release.
Team, Investors and Partners
Paraswap raised $2.7M in a seed funding round, with the contribution of 32 investors including Blockchain Capital, Alameda Research, CoinGecko,...
Paraswap has integrated with multiple protocols, some of which are Chainlink, Unslashed Finance, Uniswap, SushiSwap, Aave, Kyber,...
Is Paraswap (PSP) a good investment?
I hope that with the aforementioned information, you have understood what Paraswap is and how Paraswap works. This article should give you a deep insight into the project, so there is no financial advice. You should Do Your Own Research before conducting any investment, and be responsible for your own fund.
However, Coin98 will provide some notable points of the project to give you the best overview to make your own decisions:
Recently, the project airdropped a huge number of tokens (7.5%) to early contributors of the project. Airdrop is a great way for a protocol to launch its token, as it brings more users to the platform as well as rewards early supporters that have grown the project.
However, the airdrop by Paraswap became controversial. Although the project has been available for a pretty long time (since 2020), leading to the fact that the protocol has more than 1.3 million users, only about 20,000 received the airdrop.
This raises a question: Is the recent emergence and growth of Paraswap sustainable? Are their supporters willing to stay or are they gonna leave after the airdrop? Can Paraswap develop after this “drama”? Let’s take a look at how Paraswap has grown after this massive airdrop.
As you can see, there was an enormous price surge in the daily volume of ParaSwap a few days ago. Nevertheless, the number was still too small compared to that in April - May 2021 (only equal 1/2), and only equal that in June, August, and September 2021. Hence, this growth seems not prominent and convincing enough.
In comparison with other popular DEX Aggregators like 1inch and 0x, there has not been any significant change in the Trading Volume on Paraswap. Actually, only until recently can the Trading Volume on Paraswap equalize that on 0x, but still far away to reach 1inch.
The same situation can be seen in the Market Share. Although there has been an steady increase from the protocol, that is only enough to equalize 0x, not to say 1inch.
After such a resonating airdrop event that has attracted massive attention from crypto investors, a lot more expectations for Paraswap are appearing. However, whether Paraswap can live up to those expectations is another story.
Nevertheless, Paraswap is still one of the biggest DEX Aggregators at the moment, and recent activities from the project may be the catalyst to push it further towards its competitors. It is important that we follow the protocol and see how it’s gonna perform after all of this.