O3 Swap: A Cross-Chain Aggregation Protocol for DEFI 2.0

DeFi is growing in popularity at an extremely rapid pace. However, as everyone in the crypto world already knows, Ethereum is notorious for its scalability and congestion issues. The growing popularity has directly led to unprecedented levels of network transaction fees and gas costs. Apart from this, multiple DeFi ecosystems, functioning no tokens from different blockchains have also hindered liquid trade in the crypto space. The crypto world has been trying to come up with an efficient method to solve these problems for quite some time now, and O3 Swap believes they’ve achieved just that with their latest product. 

O3 Labs’ latest venture is a cross-chain aggregation protocol, named O3 Swap. O3 Swap allows its users access to a wide number of crypto-based financial services, effectively allowing them to “swap” various digital assets at the lowest rates possible, by using their O3 wallet. 

Notably, O3 Swap supports cross-chain transactions, i.e, between two tokens deployed on separate blockchains which are usually non-communicative. Let’s take a detailed look at this project, and see if it lives up to its hype.

Background

Before getting into the project details, it is important that we understand who O3 Labs are, and what they have accomplished in the crypto space so far. Launched back in 2017, O3 Labs had focused its effort on the O3 Wallet, a multi-asset crypto wallet, allowing its users to buy, hold and stake crypto efficiently, in a single space. 

O3 Labs provides digital asset management tools for over 100,000 users across 40 different countries, with a special focus on countries like Japan, the USA, Russia, Korea, and China, among other European countries. 

Seeing the rapid growth of DeFi (DEX, in particular, amassing massive growth), and the associated problems, O3 Labs has dedicated itself to providing the world with a simple and efficient way of trading, by comparing different exchanges on different chains, to arrive at the most cost-efficient solution. With the O3 Swap protocol, O3 Labs provides its users with a one-stop aggregation and exchange platform, along with offering developers an “open, distributed, limitless, and secure trading environment.”

Features of O3 Swap:

1. Permissionless and Censorship Resistance: No requirements for KYC review. Anyone can access the O3 Swap at any time.
2. Liquidity Aggregation: Users are able to exchange assets at the lowest rates with efficient trading routes by connecting their decentralized wallets
3. Cross Chain Exchange: This allows users to transact with tokens from different blockchains in a single place.
4. Community Governance: Realized by O3 Swap token and a Decentralized Autonomous Organization (DAO).

Technology Architecture

To ensure integrity and symmetry of information in a liquid market, O3 Swap utilizes a four-layer structure, to arrive at a safe and efficient trading environment.

1. Network Layer: High-quality public chains (Including Layer 2 networks) are aggregated in the network layer. 
2. Market Liquidity: O3 Swap aggregates different liquidity sources, allowing the platform to identify and recommend the best exchange quote. 
3. Settlement Layer: Transaction settlements are accomplished in this layer, along with cross-chain protocols and pools. 
4. Application Layer: Provides developers access to a complete service API, to integrate into different applications. 

The O3 Swap protocol utilizes two main functional modules, namely the O3 Aggregator (exchange aggregators) and O3 Hub (cross-chain pool). Deployed on mainstream blockchains like Ethereum, Binance Smart Chain, Neo, Solana, and Polkadot, among others, O3 Aggregator is the functional module that allows the platform to identify and recommend the most effective trading rates and routes. 

O3 Hub, on the other hand, provides the users with the ability to transact across different chains based on PolyNetwork. This enables users to add liquidity through a single token (the O3 Swap token) from across multiple chains to earn income in the form of cross-chain transactions fees and O3 rewards

Competitor Analysis

While there are popular Swap protocols existing in the market, like UniSwap, SushiSwap, and AnySwap, among others, the proprietary cross-chain aggregation protocol built by O3 Labs should help them stand apart. 

While reports are surfacing about SushiSwap and AnySwap coming together to integrate cross-chain support, it is safe to say O3 Labs would have a reasonable advantage in this field. O3 Labs has been a reputable crypto player in the Asian and European markets which should give them sufficient market share to enable them to do what they do the best – make crypto easy. 

Token Economics

The native token of the O3 Swap protocol, the O3 Swap token, acts as a mediator to promote the development of the O3 Swap network. All participants in the O3 Swap network are incentivized to invest in the maintenance of the network through the community governance using the tokens as a tool. There will be a maximum issuance limit of 100,000,000 pieces, divided into two distribution phases. 

The first phase (interestingly named Phase 0, as this includes token distribution as Genesis Incentive), is limited to 10 million pieces. 5 million pieces are allocated for motivating early contributors to participate in the public launch while the remaining 5 million pieces are utilized to reward community feedback. The second phase (Phase 1, following the same logic) is allocated the remaining 90 million pieces, to be vested in a period of two years. 35 million tokens are reserved for trade mining, 30 million as reserves, 15 million for investment and cooperation institutions, and 10 million for the O3 Swap team.

There are three ways to earn the O3 Swap token. 

1. Airdrops through early participation in the community, including product testing.
2. Trade Mining Rewards by staking O3 Swaps.
3. Liquidity Mining, by providing liquidity to cross-chain pools. 

It is important to notice that the O3 Swap tokens earned through these methods are in a locked state. Users will be required to provide liquidity with O3 trading pairs to main Decentralized Exchanges (DEXs) to unlock the O3 in their account. Benefits of earning O3 Swap include: 

1. Member Rights: Staking O3 allows users to obtain interest and transaction discounts, as allocated by the O3 Treasury.
2. Governance: The community can participate in the governance of the network by utilizing the O3 swap token. This includes processes like initiating proposals and participating in the voting process among other things. 
3. LP Staking: Users can utilize the O3 Swap token to synthesize Liquidity equity proof – to be utilized for unlocking and mining. 

The O3 Swap token captures value by utilizing a buyback and redistribute model. All transaction fees from the O3 Swap platform will be utilized to buy back the O3 Swap tokens from the open market, which will then be applied to treasuries for redistribution. During the first stage of the governance period (Q1 – Q2 2021), 70% of the treasury’s revenue is allocated to O3 stakers, in an effort to motivate community contributions (with the remaining 30% allocated for the development committee). The Development Committee is responsible for overseeing the development of the project, along with community construction, initially comprised of O3 Labs, Community Contributors, and representatives elected by the community. In due course of time, the development committee will be fully comprised of people elected by the O3 Swap community.  

Investors Details

O3 Labs are backed by Softbank Singapore,  Binance Smart Chain, Neo, Huobi ECO Chain, PolyNetwork, NGC Ventures, OKEx Blockdream Ventures, Seven X Ventures, FBG Capital, Puzzle Ventures, Incuba Alpha, Moonwhale, and BTC12 capital, reportedly securing US$2 million in investment. 

Recent Progress

O3 Swap officially launched the website on the 23^rd of March, along with a litepaper and user guide, and a roadmap. As recently as the 20^th of April 2021, O3 labs invited its community member to join the O3 Swap testing. The trial version went live on the 25^th of April 2021. The O3 Swap R&D club also announced a bonus O3 reward, to 100 users who give the best feedback, currently live on its discord servers (to be distributed mid-may). This program is live till the 10^th of May 2021, so check out their announcement for further details.  

The O3 Swap R&D club initiative is different from the testing event, and interested users can participate in both the activities for rewards (i.e, not mutually exclusive).

Roadmap

O3 Labs plan to launch O3 Hub, the O3 Swap token, and version 1 of the O3 Swap token sometime within Q3 of 2021. By the end of 2021, they promise to release DAO version 1, along with Deployment of aggregation protocol on Layer 2 networks, and completion of the O3 Hub across Layer 2 networks. Their plans for 2022 include supporting instant quote and pending order, cross-chain v2.0, the full release of the O3 Network, and the launch of a DAO v2. You can follow their website and socials for future updates on the project – links provided at the end. 

Conclusion

While O3 Swap is only in its trial version now, it is safe to say that the Q3 Launch of the protocol is much awaited by crypto enthusiasts. If the protocol manages to deliver everything it promises, it won’t be surprising if O3 Swap becomes a staple part of the crypto world. High liquidity and instant swaps across chains in a single platform is something that is highly necessary, especially as the world of crypto is increasing faster than ever before. We’re highly excited about what the future holds for O3 Swap. 

Hereby we are thrilled to announce #O3Swap IDO platforms. Stay tuned for more details. ⏳ @BSCPad @dao_duck @CobakOfficial @westarter_org @bounce_finance pic.twitter.com/guZ7C6Vo3J

— O3Labs (@O3_Labs) April 30, 2021

03 Swap Recently Announced Details about their upcoming public token sale, They will conduct token sale on Five top tier IDO Platforms – Bounce, BScPad, DuckStarter, Cobak and Westarter. 

The whitelisting is now open for upcoming IDOs on these platforms, you can find more details about whitelisting process from o3swap twitter.

You can find more details about this project from its Website, Litepaper, Twitter, and Telegram.