There is a growing demand for alternative exchange solutions in the cryptocurrency world. Services facilitating atomic swaps or decentralized trades are of keen interest. Mooniswap certainly has some benefits to it, and may prove to be an intriguing contender.
A Different Liquidity System
Any centralized exchange, trading platform, or broker can only succeed if there is sufficient liquidity. Attracting that liquidity can sometimes be difficult, especially where altcoins and alternative assets are considered. For Mooniswap, the way to aggregate liquidity is via the 1Inch1 protocol. In turn, this allows for automated market making.
By maintaining liquidity pools for supported assets, users can switch between their favorite tokens with ease. No one can claim custody of the funds except for traders themselves. At the same time, liquidity providers will earn rewards in the form of trading fees. It is an interesting passive revenue stream, and a model more projects will embrace eventually.
It is important to note that automated market making, or AMM, isn’t unique. Bancor was the first project to explore this particular functionality. It has since been integrated by other projects, including Uniswap, Balancer, and so forth. However, the version developed by 1Inch1 lets liquidity providers benefit from price slippage, which other projects do not provide.
More Income for Liquidity Providers
Based on the AMM implementation, it is evident that liquidity providers are crucial. To reward these users, the Mooniswap team will not spare any effort. Through its improved version of AMM, the platform can generate up to 200% more income for liquidity providers from price slippage profits alone.
Not only is this a clear evolution of AMM, it also empowers the end users. Being rewarded for contributing liquidity is a crucial aspect in this industry. Centralized exchanges often keep the profits to themselves, whereas Mooniswap takes a very different approach. It provides a fresh wind in the industry, which is always a good thing.
Competitive Fee Structure
At its core, the Mooniswap platform uses a 0.3% swap fee. A respectable amount, but one that can be lowered in the future. The team has mentioned how it will be possible to swap at 0% fee in the future. This can grant another competitive edge to the platform, depending on how that fee-less structure is approached.
Interestingly, there is also a Referral Fee. Not for users, but for other projects and solutions connecting to Mooniswap. This fee is only charged if a referral wallet is specified in the transaction. This fee is fixed at 5%, regardless of how much income is earned by liquidity providers.
Native Price Oracles
The current and future role of price oracles in crypto cannot be ignored. Many platforms and services use decentralized oracles to provide correct information. Rather than incorporating ChainLink – like everyone else seems to be doing – Mooniswap is using its own solution.
Its on-chain volume-weighted average price oracles store data in both directions. The data will be updated after every single transaction to provide accurate details to users. The big test is figuring out if they can be manipulated by malicious individuals or not. According to the team, that shouldn’t be the case. Time will tell if they are correct in this assessment.