DeFi or decentralized finance is currently the hottest topic in the crypto space; however, it shouldn’t come as a surprise that DeFi was an original objective for the creation of blockchain technology, meant to represent the future backbone of the financial world. That being said, it was only recently when effective and practical tools were developed to achieve this objective. Decentralized exchanges and liquidity pools are among the tools leading the DeFi revolution.
Users who want to trade in a fully decentralized manner have many options to choose from, which can make it confusing to make the right choices, depending on their wants and needs. In this article, we’ll break down three of the most popular and promising swap and liquidity providing protocols currently on the market: Uniswap as a popular option, and Anyswap and Trustwap as new promising options.
We will first discuss the features of each platform, then compare them based on the most important criterias for users. So, without further ado, let’s start by reviewing Anyswap.
Anyswap exchange is a new open-source cross-chain swap protocol that provides automated pricing and liquidity systems. Anyswap is built on Fusion chain and powered by Fusion’s DCRM technology (Distributed Control Rights Management) which allows swaps to occur between any coin or token from any blockchain that uses the ECDSA or EdDSA signature algorithm. Simply put, users will be able to swap between BTC, ETH, XRP, USDT, LTC, FSN, ERC20 tokens and other coins in a fully decentralized and secure way.
Anyswap introduced ANY, a token issued on Fusion blockchain. There wasn’t a pre-sale or fundraise prior to issuing the token. ANY is a governance token that allows its holders to make decisions, such as voting for the listing of new coins or tokens, and electing Anyswap Working Nodes (AWN). ANY token will also be used to reward users for using the different features offered by Anyswap, such as exchanging coins and tokens, adding liquidity to pools, or running Anyswap nodes.
Anyswap Working Nodes will therefore be elected by the community (ANY holders), this process will contribute to the full decentralization of the network, and the Anyswap team does not have any control over your funds.
At this time, Anyswap has been launched for a few weeks. Its activity and adoption statistics are notable for having only one liquidity pool (FSN / ANY). Other coins and tokens like BTC, ETH, USDT or XRP will be added soon, which will further impact Anyswap’s adoption.
See the statistics of the platform three days after its launch:
In two weeks after the launch, the liquidity of the $FSN/$ANY pool has almost doubled compared to the previous statistics from the 3rd day, with more than 6.5M USD contributed to the pool. Also, the annual yield percentage managed to stay highly profitable, at 430%.
Additionally, Anyswap announced that USDT will be added on August 18th, 2020. This will bring more adoption and higher numbers to Anyswap. Another important development is its strategic partnership with Hotbit. The centralized exchange Hotbit and Anyswap will mutually collaborate on top DeFi projects and the discovery of new DeFi tokens. All DeFi related projects issued on Anyswap will be listed on Hotbit with top priority. Hotbit will also provide Anyswap with $1M worth of liquidity to build their mutual DeFi ecosystem. So stay tuned, as major developments are coming to Anyswap in the near future.
Uniswap is an open-source swapping protocol that facilitates on-chain exchanges within the Ethereum blockchain. Uniswap allows users to swap between different ERC20 tokens in addition to Ether (ETH) through an automated liquidity system.
Uniswap is decentralized, and unlike Anyswap, it does not have any utility or governance token. It is currently one of the most used and popular DeFi tools according to DeFiPulse, with more than $96M in locked value.
Earlier this year, the DeFi space and particularly Uniswap, suffered from flash loan attacks that allowed hackers to run away hundreds of thousands of dollars. To remedy this situation, a new version of Uniswap has been released. Uniswap 2.0 is more resistant to this kind of attacks and offers more advanced and suitable features to the DeFi space.
Trustswap is a new ecosystem whose main objective is to facilitate financial transactions and offer lower fees for businesses. Trustswap specializes in financial services that can be done through smart contracts such as time-released payments, token locks, event release, cross-chain swaps, and other DEX solutions.
Similarly to Anyswap, Trustswap will use a governance and utility token “SWAP”. It is an ERC20 token that gives its holders voting rights to govern platform decisions. Also, the platform will charge lower fees when paying services using SWAP tokens.
Initially, Trustswap will provide these services within the Ethereum blockchain, and then extend to other blockchains through wrapping coins into ERC20 tokens. The whitepaper was recently released, which focuses more on explaining the services the platform will provide and less on the technical aspects that allows the ecosystem to provide complex services as cross-chain wrapping and time-released payments.
Now that you have a general idea about Anyswap, Uniswap and Trustswap, let’s compare them based on the most important aspects for users:
- Defi: Which protocol is the most suitable to current Defi needs and offers the best features?
- Rewards and fees: Which decentralized exchange has the lowest fees and the best rewards?
- Security: Which protocol provides the highest security and the safest experience?
- Prospects: Which protocol is expected to have the best adoption and success in the future?
Currently, the DeFi space is primarily focused on Ethereum, a blockchain on which most DeFi tools are built. However, this is only a starting point for decentralized finance, and progress must occur on blockchains other than Bitcoin, but also XRP, LTC.
Cross-chain technology is a must to take DeFi to the next level with regards to interoperability. Tools like Uniswap and Trustswap have some limitations when it comes to this aspect. Anyswap uses Fusion’s DCRM technology to ensure interoperability and communication between the different blockchains. These features allow Anyswap to have more use cases and potential. Trustswap will also use a cross-chain technology, however, according to their roadmap, this feature will be launched in Q4 of 2021.
Anyswap is built on Fusion chain, a project whose main goal is to link the traditional finance to blockchain. Fusion has been working on decentralized finance before the buzzword DeFi appeared. The project has developed features such as a time-lock function and multi-triggering mechanism which allow complex financial operations to be carried out. Basically, Fusion created a flexible ecosystem for DeFi tools such as Anyswap, to implement efficient features and use cases.
Rewards and Fees
Let’s first look at network fees, a crucial aspect because fees vary greatly from one network to another. We’ve seen how offering cross-chain DeFi transactions is important, but how important is it for users to pay lower fees? As a rhetorical question, we know this a major incentive for acquiring users!
Let’s see a comparison of fees in this transaction: $1,240 in Ether on the Ethereum network, with $ 7.45 in fees. On Fusion Network, a transaction of 2112.99 FSN valued at $1,364, cost 0.000066FSN (around $ 0.000043). The numbers speak for themselves, and the user who made the transaction on the Fusion network paid around 100K times less than the Ethereum network user.
The first transaction is an Uniswap transaction, while the latter is a transaction from Anyswap. As you can see, Uniswap and Trustswap users pay high transaction fees, while Anyswap users pay 100,000x less in transaction fees. Anyswap is the only swap protocol that supports ERC-20 tokens without being built on Ethereum. Users can access Ethereum tokens through its cross-chain technology with much lower fees than exchanges built on Ethereum.
Also mentioned earlier, in addition to Ethereum, Anyswap will also use DCRM technology to support major blockchains such as Bitcoin, Cardano, Litecoin, Cosmos, and Ripple.
Now, let’s move on to platform fees and rewards. When swapping cryptocurrencies, Uniswap charges a 0.3% fee which will be used to reward liquidity providers of that particular pool proportionate to their contribution to the pool. On the other hand, Anyswap charges a 0.4% swapping fee, from which 0.3% goes to liquidity providers, and 0.1% to the project.
Does it mean that Anyswap charges more than Uniswap? No, and here’s why.
Do you remember ANY, Anyswap’s utility and governance token? ANY is used to reward all the users of the exchange, including swap traders. Indeed, 25% of its total supply has been allocated to “Swap and Trading.” Swap traders will share 250 ANY for every 100 Fusion blocks, proportionate to their trading volume during this period. All things considered, trading is more rewarding with Anyswap.
While liquidity providers share the 0.3% trading fees as rewards on both Anyswap and Uniswap, Anyswap liquidity providers will receive around 9900 ANY daily, in addition to the 6600 ANY they earned before Working Nodes are set up. This is significant considering the current price of ANY. ($ 1.57 at the time of writing).
Uniswap has been up and running for almost two years. During this period, several attacks targeted DEXes, with the most notable one known the flash loan attack that occurred earlier this year, resulting in the theft of $ 350K worth of Ether. This was one of the main reasons that led to the launch of Uniswap V2.
Uniswap V2 was launched with the aim of offering more features, but above all, to strengthen the security of the exchange. However, Uniswap users are still facing a token listings issue. Basically, anyone can add fake cryptocurrencies to Uniswap, and choose to give these tokens names and logos similar to famous cryptocurrencies.
On the other hand, Anyswap will be fully decentralized through the use of Anyswap Working Nodes. The Anyswap team does not have management over its users’ tokens, unlike other exchanges such as Bancor that claim that they are decentralized. Bancor was hacked back in 2018, and the team managed to freeze the stolen BNT tokens. You may think this is good news, however, the team managed to do this because it had control of BNT smart contracts.
When it comes to tools that could be the center of tomorrow’s DeFi space, is important to define which have the most potential to fulfill the needs of the decentralized finance world.
According to btconethereum.com, only 19600 bitcoins are currently locked in the Ethereum blockchain, which represents roughly 0.1% of the circulating supply of BTC. This gives a clear idea on how early we are in the DeFi space. With the features it offers, Anyswap is able to meet DeFi requirements and needs.
On Anyswap, users can safely trade coins and tokens without worrying about buying scam tokens. Moreover, Anyswap uses an already established cross-chain technology, and it is the only exchange that rewards all the users, including swap traders, for using the platform.
Uniswap, is a reputable swapping protocol among the Ethereum community. However, it is limited to Ethereum blockchain, and its other main issue is that it makes it easier for scammers to list fake tokens and steal users’ money.
The third exchange we reviewed is Trustswap. Currently, there is a lot of hype around this project that promises a lot of interesting features in its whitepaper. However, very few technical details are provided on how the team will implement these features.
All things considered, Anyswap seems to be the best exchange when it comes to liquidity and security, and the most suitable option in terms of cross-chain DeFi.