Moonswap : Community Driven Next generation AMM protocol

If you’re familiar with the DeFi space, you’ve probably heard of AMMs, or automated market makers. They are one of the biggest innovations in the crypto world so far, and they have revolutionized the way traders exchange various crypto tokens. The Uniswap platform built on top of the Ethereum blockchain is the first prominent example of an AMM. Hayden Adams invented Uniswap so that the liquidity pools on the platform let users swap crypto tokens in a smooth, wholly decentralized, and non-custodial fashion. AMMs also allow users who deposit liquidity in said pools (aka the liquidity providers or LPs) to generate a passive income by earning a portion of the platform’s trading fees, in proportion to their shares in the pools. 

Since Uniswap’s launch, quite a few other AMMs have launched following the basic architecture of Uniswap, but with the aim to improve on that platform’s many shortcomings. This new batch of automated market makers include the well-known SushiSwap, PancakeSwap, and quite a few others. Now, these new protocols are remarkably well-developed and indeed exciting, but as Ethereum continues to host numerous new projects, the GAS fees on the platform are also undeniably becoming higher. This is where MoonSwap comes in, with an upgraded design and the intention to do away with this very problem. 

MoonSwap is the world’s first cross chain hybrid DEX (decentralized exchange) running on Ethereum Layer 2. The decentralized trading platform is built on the bottom of the Conflux blockchain. MoonSwap aims to banish the speed as well as high gas fee issues that previous AMMs like Uniswap can’t avoid. 

MoonSwap, through its use of the Conflux blockchain, is in the position to make crypto trading a swift, efficient, and even an almost free process. The MoonSwap platform uses the Conflux blockchain’s Tree Graph or TG technology to facilitate the confirmation of transactions made within as little as 23 seconds, while also managing a throughput of up to 6,000 TPS (transactions per second).

The MoonSwap platform’s native crypto coin is the Moon token. The platform launched the Moon token very recently in September 2020.

MoonSwap: the Background 

The MoonSwap project is quite passionate about the American science fiction media franchise ‘Star Trek’. For the platform, they have what they call a ‘five-year mission’, which is another reference to Star Trek. This is how they describe their objective “Every member of MoonSwap community is a crew on the “Enterprise” starship, Enterprise will lead us to explore and connect with this Crypto Universe composed of lots of Blockchain Planets: To boldly go where no man has gone before, while getting $Moon as rewards.”

The team of developers behind the MoonSwap platform have chosen to stay anonymous so far. The founder of the project, however, has dubbed themself Mr. Moon, and operates under that name. The team has cited this as their reason for staying anonymous, while speaking with CoinMarketCap:

“The most important thing is that we hope that as a community project, we don’t want someone to be too important in this project. Especially when more and more developers from the community join the development of MoonSwap, the concept of a ‘founding team’ will become less and less important.”

According to one member of the MoonSwap team, the aforementioned Mr. Moon has had some experience working at a traditional internet organization. Reportedly, the CTO of MoonSwap is also similarly experienced, and has been involved in contract development since 2017. That is all the information MoonSwap has offered up about their team members thus far. 

The Technology Architecture of MoonSwap:

The MoonSwap platform, as mentioned above, introduced the Layer 2 solution to automated market makers. The aim is to allow the users who hold assets on the Ethereum blockchain to enjoy the “high-speed and zero GAS fee” experience, as well as achieving greater asset utilization. 

MoonSwap was developed in association with the Conflux team. The MoonSwap platform is secured by a proof-of-work (POW) consensus mechanism. The mining network works to keep out the chances of both 51% and re-entrancy attacks, so the MoonSwap network enjoys maximized safety. 

The smart contracts on MoonSwap have been audited by a number of third-party security firms, Slowmist and KnownSec to name a few, and no weaknesses were found. Notably, you can also check on the smart contract code for the MoonSwap platform, since they made it available on the MoonSwap GitHub repository.

Conflux made use of the core design idea of the Bitcoin blockchain, which is that ‘computing power is the only weapon competing for the right to generate blocks’. By adopting the Tree Graph (TG) tech, Conflux helped MoonSwap realize the high throughput rate of 3000–6000 TPS on the network without compromising with the aspect of decentralization. This way, the transaction fees on the platform will also be more cost-effective, being much lower than a cent. A transaction on MoonSwap can get confirmed within 23 seconds, and its security level would be the equivalent of 6 blocks on the Bitcoin blockchain, and as much as 30 blocks on the Ethereum platform.

The MoonSwap team plans to treat Conflux as the Layer 2 of the Ethereum platform, so they are capable of developing a high- speed automated market maker and receiving cross-chain crypto tokens. MoonSwap can help Ethereum users bring their holdings over to the Conflux chain and have cTokens minted. 

The MoonSwap platform abides by Chef Nomi’s (the creator of SushiSwap) view of how liquidity providers can generate income on traditional AMMs, which is “Liquidity providers only earn the pool’s trading fees when they are actively providing liquidity to that pool. Once they withdraw their shares in the pool, they can no longer receive that passive income.” However, as many previous AMM protocols have shown, once the platform gains traction, the individual liquidity providers face the threat of having their returns diluted as much larger and wealthier stakeholders join in with sizable amounts of capital, like venture funds, exchange platforms, and mining pools. 

Keeping the benefit of liquidity providers in mind, MoonSwap – while following SushiSwap’s core design, also adds multiple incentives for the liquidity providers’ gain. These incentives include the opportunities to earn Moon tokens, to get a portion of the transaction fees the MoonSwap platform generates in accordance to each liquidity provider’s share, to earn Conflux Network tokens or FC tokens, and to receive tokens from MoonSwap’s various airdrop partners. The MoonSwap team also states that as the community grows, with time there will be other exciting new incentives for the liquidity providers on the MoonSwap platform. 

Competitor Analysis

MoonSwap, being an AMM in the developing DeFi space, has a good number of competitors in the form of the leading automated market makers like UniSwap, SushiSwap, PancakeSwap, BakerySwap, MooniSwap, Raydium, and PolkaSwap. Now, it’s true that most of these platforms have communities much bigger than MoonSwap, as well as quite a few other advantages. However, with its upgraded features and the fact that it’s powered by not one, but two of the largest platforms in the crypto space at the moment, MoonSwap does have quite a few advantages over its many competitors. 

Token Economics 

The MoonSwap platform launched its Moon token back in September 2020 after announcing its asset migration process. The Moon token, or MOON, abides by the ERC-20 token standard that all Ethereum-based tokens have to follow. The Moon tokens are deflationary, and operate as a reward mechanism for all holders; this is because all the transaction fees the platform earns are distributed among the MOON holders. 

The maximum supply of the MOON tokens is reportedly capped at 100 million. By the end of 2020, there were already just under 10.65 million MOON tokens in circulation. 90% of the newly minted MOON tokens are distributed among the liquidity providers on MoonSwap, and the remaining 10% is kept for the team behind MoonSwap.

According to the MoonSwap team, it’s going to take about 7.6 years for the total supply of Moon tokens to be out in circulation. The number of Moon tokens mined per block will be cut in half every 1.9 years, following the Bitcoin halving rule. In stage 1, the number of Moon tokens generated per block is 10, and at the end in stage 4, it will be at 1.25 Moon tokens per block.  

98.75% of the total supply of Moon tokens is supposed to be distributed through MoonSwap’s liquidity mining process. While the remaining 1.25% of the entire MOON supply had initially been reserved for the Moon-EcoGrantsFund (MEGFI), later it was burned according to the wishes of the MoonSwap community.

If you wish to own Moon tokens, you can find it listed on the Uniswap protocol. So far, Uniswap is the only third-party crypto exchange platform to have supported the Moon token. However, cMOON tokens can be swapped out for other Conflux Network-based crypto coins. 

Price Performance History

At the time of its launch in September 2020, the MoonSwap price was slightly over $3.30. However, from then on, the MoonSwap price saw quite a bit of up and down. In October 2020, the price had fallen to a little over $0.5. In November of the same year, the MoonSwap price had further declined to around $0.4. In December, again, the MoonSwap price was near $0.2. The Moon token entered 2021 on a similar note with a price of $0.0002, give or take. At the end of February, however, the MoonSwap price rose to about $0.3. At the beginning of June 2021, the price of the Moon token stood at near $0.0008.   

Conclusion:

The MoonSwap platform, along with being based within the Ethereum ecosystem, possesses another advantage that helps it stay above its competitors. Said advantage is that it enjoys technical support and endorsement from the Conflux network, which is one of top technical teams from China. MoonSwap is an integrated project that brings together the top qualities of some of the topmost crypto projects in the DeFi space, namely Uniswap and SushiSwap’s AMM tech, and the incentives Yearn Finance has for their liquidity providers. 

So far, MoonSwap’s underlying technology is one of the most advanced in the industry. The MoonSwap platform makes use of the Layer 2 solution of the Ethereum blockchain to combine the ideas of Uniswap’s creator Hayden Adams and SushiSwap’s Chef Nomi, therefore MoonSwap is already theoretically more powerful than two of its biggest competitors. It also gives its users many, many advantages, including the highest TPS of 6000, nearly nonexistent GAS fees, a far more diverse DAO (decentralized autonomous organization) governance, and of course, a varied and richer income portfolio. Judging by its performance so far, it can be said that MoonSwap is expected to expand further in the coming times. 

If you’d like to find out more about the MoonSwap platform, you can follow the project’s accounts on various social media, such as Medium, Github, Twitter, Discord, and Telegram.