Introduction
Led by Uniswap, Automated Market Makers (AMM) were introduced into the crypto world and soon became a typical representative of DEX, bringing liquidity to the DeFi market.
In essence, an AMM exchange no longer relies on the order book model but forms a pool of liquidity provided by others and builds the market on a certainty code. Traders can obtain better liquidity, while ordinary users can get a profit from transaction fees as long as they use assets to provide liquidity.
Uniswap is such a DEX that consists of swap pools and AMM. The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain via smart contracts. As of March 2021, Uniswap was generating fees of approximately $3 million daily for the liquidity providers who facilitate liquid markets for the cryptocurrencies being exchanged.
SwapAll, on the other hand, is a DEX that consists of swap pools and AMM as well, in the meantime, it also provides its users with airdrop pools, liquidity pools, Vaults, NFTs, industry leading tokenized NFTs, and even more to come. SwapAll is always dedicated to build an all-in-one solution for blockchain users just on one platform. As of July 2021, the accumulated deposited UDST has reached 50 million within one year.
Layer 2 Technology
The current congestion problem of the Ethereum network is obvious to all, which directly limits the total amount of DeFi transactions and hinders the possibility of DeFi’s expansion to a larger volume.
The most direct user experience is that the decentralized exchange based on the Ethereum main net is delayed due to the long confirmation time. In addition, the high gas fee is often tens and hundreds of dollars, and it is not uncommon for the handling fee to even exceed the amount of the transaction itself. This not only greatly increases the user’s transaction costs and entry barriers, but also makes the user experience uncomfortable.
As the public Ethereum chain is considered Layer 1. If users move some transactions on Ethereum to Layer 2 for processing, the results will be returned to Layer 1 after the processing is completed, so that there will be no delaying problems due to Layer 1 congestion. Thus, the Layer 2 solution is invented.
In early November 2020, the semi-centralized SwapAll mobile app was launched; in mid-April 2021, all the data was shifted to the Ethereum Layer 2 side chain, completely achieving complete decentralization.
Uniswap also was targeting an L1 Ethereum mainnet launch on May 5, with an L2 deployment on Optimism set to follow shortly after.
Both DEXs have completely implemented side chain solutions to drastically reduce its gas fee for all users and speed up all on-platform transactions.
Transaction Fees
Compared with Uniswap v2, Uniswap v3 has made some changes in transaction fees:
When adding liquidity, there are 3 levels to choose from: 0.05%, 0.3% and 1%, and more optional rates can be added through governance rights.
The transaction fee charged in Uniswap v3 will not be automatically reinvested (mainly for convenient contract calculation) as opposed to v2, users need to manually withdraw the transaction fee.
On the other hand, according to statistics, since the launch of SwapAll, the number of transaction fees has shown an average monthly growth trend of at least 100%. As of July 2021, the total transaction fees generated reached 209,377 USDT.
The transaction fee of SwapAll is 0.3%, in which 0.15% will be voted by the community to decide whether to destroy or repurchase. The other 0.15% has been returned to the liquid mining pools, and the holders of the liquidity mining pool LP have already enjoyed a 0.15% commission dividend.
Chain Support
Uniswap now only supports ETH chain, and it is the mother chain of PancakeSwap, which uses the original Ethereum blockchain to run its network as opposed to BSC.
SwapAll, however, has officially supported ETH, BSC, HECO, HSC this year, making itself the DEX that supports almost all the main chains in crypto industry.
Incentive Mechanism
As mentioned, Uniswap rewards liquidity providers by transaction fees. Liquidity providers can be rewarded by the transaction fees from token transactions in the liquidity pool where they are located, and the liquidity providers are allocated proportionally based on the share of funds deposited.
Uniswap has greatly mobilized the enthusiasm of LPs through the AMM model and the model of rewarding liquidity providers transaction fees. Since anyone can provide liquidity and profit from it, people have the motivation to provide Uniswap with liquidity; the exchange obtains sufficient trading liquidity, trading slippage is small, and the user experience is smooth. The operation of the exchange is entirely based on the needs of the market. Manual operation and maintenance costs are greatly reduced.
SwapAll as well, has perfectly integrated Uniswap’s incentive mechanism into its platform performance.
Furthermore, SwapAll liquidity pool has launched Double-Token Rewards to reward its users with 2 tokens through stake farming. Plus, it has launched the two-tier vertical invitation rewarding system on APP and Layer 2 to encourage referrals. For example：User A invites User B, User A will be rewarded 4% of User B’s liquidity pool’s rewards. User B invites User C, User A will receive 1% of User C’s liquidity pool’s rewards as an indirect bonus.
Conclusion
Both Uniswap and SwapAll are splendid DEX in the industry that really think for the benefits of users and develop the platform for a better experience. After the comparison in 5 dimensions, what is your opinion? Which one do you prefer, or do you see will have a brighter future? Comment and let us know!