Swaap, a leading market-making protocol for blue-chip crypto assets, is thrilled to announce the release of our whitepaper for Swaap v2. The proposed solution is designed to offer optimal liquidity services and is set to be a game-changer in the market-making landscape.
The motivation behind Swaap v2 is to address the current challenges in the crypto market-making sector, which is split between centralized and opaque actors and transparent Automated Market Makers (AMMs) that yield negative returns for their Liquidity Providers (LPs). Swaap v2 brings the best of both worlds, offering an open, transparent, non-custodial, composable, secure, and adaptive solution.
Building on the success of Swaap v1, which proved that profitable on-chain market-making was possible, the team has learned from the challenges of V1. These include a restricted focus on low-return strategies, tackling the complexity of integrations, and latency issues with oracles.
In partnership with researchers from the Louis Bachelier Institute, Swaap has developed the most advanced market-making protocol. Swaap v2’s unique architecture manages asset balances and settlement functionalities on-chain, while the quotation becomes off-chain. This hybrid infrastructure allows for the deployment of state-of-the-art market-making strategies while maintaining high security and transparency.
The quotation system of Swaap v2 employs stochastic control theory to construct optimal quotation systems, maximizing LPs’ PnL under stochastic behaviors such as trading appetite, market price, and volatility.
Swaap v2 also sets new standards of security by introducing a novel max drawdown mechanism, a new paradigm in AMM smart contract security. On-chain safeguards like max drawdown, last look, max imbalance, and penalties have been implemented to ensure Liquidity Providers’ fund’s safety.
Thanks to the new infrastructure, Swaap v2 is not restricted to chains with fast oracles. It can market make more tokens and implement complex models more efficiently. This opens up real yield opportunities for DAOs and investors. LP positions are represented as ERC-20 tokens, making them ideal building blocks for creating leveraged products with even higher APRs.
For those interested in learning more about the innovative features and benefits of Swaap v2, we encourage you to read our comprehensive whitepaper. The whitepaper provides a detailed overview of our market-making infrastructure, including its unique architecture, advanced quotation system, and robust security measures. It also delves into the real-yield opportunities for DAOs and investors. You can access the whitepaper at this link
Swaap appreciates the support of the community as it embarks on this exciting journey. The team is committed to providing the best market-making strategies and eagerly awaits feedback.
About Swaap
Swaap is a revolutionary market-making protocol for blue-chip crypto assets that delivers superior yield to liquidity providers. With innovative models developed in collaboration with leading mathematicians, Swaap ensures real and sustainable yields for its users. Backed by leading VC firms and angel investors, Swaap is committed to revolutionizing the DeFi space.
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