Terraswap is the first AMM DEX on Terra and among several key protocols of this fast-growing blockchain. We all know that AMM is one of the most fundamental DeFi stacks that bootstraps liquidity for the whole ecosystem. In this article, let’s find out what Terraswap is and the value that it brings to the Terra ecosystem.
What is Terraswap?
Terraswap is a decentralized exchange on Terra, using the AMM model inspired by Uniswap. With Terraswap, people can trade, provide liquidity with different assets in the Terra ecosystem.
It acts like a liquidity hub for users to trade their assets generated from different protocols in the Terra ecosystem. For example, Terraswap is supporting bAssets from Anchor Protocol or mAssets from Mirror Protocol. This has boosted capital efficiency in the Terra ecosystem.
Despite being defined as a decentralized protocol, Terraswap still has the centralized feature. It is not a permissionless AMM like Uniswap as users can not freely list tokens or create pools on Terraswap. Consequently, the number of listed tokens on Terraswap is quite limited, the majority of them are from projects granted by Terra
How does Terraswap work?
Terraswap is offering certain functionalities as follows:
- Trading: Users can exchange different tokens available in Terraswap with low fees and fast transaction speed.
- Providing liquidity: Similar to many AMM DEXs, users can supply certain assets to Terraswap pools and receive LP tokens. These tokens represent users’ shares in the pool. Liquidity provider earns trading fees on any swap transactions from the pool they supply.
- Withdraw: Users can burn their LP tokens and withdraw their supplied tokens anytime.
What is the Terraswap’s token?
At the time of writing this article (11th October 2021), Terraswap has not launched its token yet. The Coin98 team will update you once its token is released.
Detailed information about Terraswap’s token
How to get, buy & store Terraswap’s token
Team, Investors, and Partners
Terraswap is created by DELIGHT LABS, which also runs validators for NuCypher, Orbs Network, SKALE Network, Oasis Labs,...
Is Terraswap a good investment?
I hope that from all the mentioned information, you can get a basic understanding of Terraswap to start researching more about this project. It is hard to tell firmly whether any project/ token is a good investment or not.
However, I will provide you with some key highlights of Terraswap so that you can do your own research and make your own investment decisions.
Terraswap is built on the Terra blockchain, which sees promising growth in the future. From the chart below you can see that Terra TVL from July 2021 did not record a skyrocket pump but still increased steadily. Terra may be under the phase of accumulating capital and attracting more uses to prepare for more impressive growth in the future.
Terraswap has the advantage as the first-mover AMM DEX on Terra. It has already helped many other protocols in Terra to capture more liquidity for their assets. It is the AMM DEX in Terra that has the highest TVL as of now and still records an impressive growth rate of 27.76% in the past week.
Therefore, Terraswap can be seen as one of the important legos in the Terra ecosystem, and hence will directly benefit from the development of the whole ecosystem.
Moreover, Terraswap has not released tokens yet so there might be a chance of airdrop in the future. Therefore, you can “skin in the game” with Terraswap and follow the projects in order not to miss any earning opportunities.
Some similar projects:
- Uniswap (UNI): One of the first fully decentralized exchanges (DEX) built in 2018 on top of the Ethereum blockchain.
- Raydium (RAY): An automated market maker (AMM) and liquidity provider built on the Solana blockchain for the Serum decentralized exchange (DEX).
That is all you need to know about Terraswap. If you have any questions related to this protocol, feel free to comment in the section down below. You can also join our community at Coin98 Community to discuss any topics that you are interested in. Have a nice day!