Saturday, November 28, 2020

Tokswap, Elastos’ Uniswap

By Jeremy G and Kenneth K

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In order to promote the new AMM exchange Tokswap, Elaphant Wallet has created three tokens which support its ecosystem: Apple, Banana, and Sugarcane–tributes to the favorite foods of elephants.


The AMM functions very similar to Uniswap on Ethereum. Simply choose the token pairs and approve the assets before swapping. Even DMA’s token is already supported for trading with the extremely low gas fees on ETH sidechain.


In the very near future, Tokswap has plans to add shadowtokens, a cross-bridge between ETH and Elastos ETH Sidechain. This will allow easy cross chain decentralized AMM trading. At the moment, however, you can only bring ELA to the ETH sidechain through Cryptoname’s website or  recharging from the elastOS Wallet.

If you want to view Elastos’ ETH sidechain, you can explore all tokens on it here: https://explorer.elaeth.io/

Each new token will have a different max supply:

Banana: 1000

Sugarcane: 2000

Apple: 4000

The value of each max supply was initially set at 100 ELA (100 ELA x Max Supply = Market Cap), which puts each around 144 USD total diluted market cap on release. Thus, value is likely to fluctuate greatly. Indeed, each has already appreciated 4-6x since release.


In addition to the three tokens, an Elaphant token will be released as incentivized rewards. 1,000,000 ELP tokens have been issued, with the team keeping 100,000 and the rest (900,000) distributed to Tokswap liquidity providers.

The pools will be as follows:

BNA-ELA LP Token : 300K ELP Token Rewards Available

SUG-ELA LP Token : 300K ELP Token Rewards Available

APL-ELA LP Token : 300K ELP Token Rewards Available

For those new to liquidity provision, in essence, in order to receive an ELP token, one must provide liquidity on Tokswap with a matching value of ELA and one of the three Elaphant fruit tokens. Once funds are provided to the pool on the platform, the user will receive Liquidity Provider (LP) tokens that represent their share of the pools. Holding that LP token will allow them to earn ELP tokens. The value of the ELP token on release is approximately 1 ELA per 1450 ELP tokens.

  1. Enter your swap amount.

2. Approve spending of asset.

3. Confirm swap.

4. Go to pool tab.

5. Enter amounts for liquidity.

6. Approve asset if necessary.

7. Supply asset.

8. Check your balance at any time.

Update Nov 11, 2020:
Elephant Wallet has a unique template for distributing its ecosystem token, “ELP”. First, one must provide liquidity in one of the 3 Fruit Token/ELA pools. (Sugarcane, Banana and Apple). Once liquidity is provided in one of these 3 fruit token pools, the LP token that is received can then be exchanged for the ELP token itself, rather than through staking the token as in many other models. The only way to obtain the ELP token is to trade through one of the 3 LP fruit tokens. ELA cannot be exchanged for the ELP token directly on Tokswap.

The ELP token itself has a few use cases. The first utility is governance. The team plans on having users vote with the ELP token for various ecosystem projects and initiatives on Elaphant. The second use case of the ELP token is potential revenue for ELP holders.


A unique idea the team has considered is placing ad spaces in Elaphant to promote third-party dApps and article content. Any partner can purchase these service and share 35%-70% of these ad revenues with other ELP holders.

Arbitrage opportunities will naturally be available between these three fruit tokens as each respective token is traded. This has been documented by the Elaphant Team on Twitter

In order to get started, transfer ELA to the Ethereum Side Chain. Metamask is the best Web3 wallet to connect to the Side Chain. Once bugs are fixed, these Web3 functionalities will be adopted on the Elephant App.

Risks:
Anyone who hasn’t provided liquidity on an Automated Market Maker (AMM) before should please be wary of the risks of impermanent loss. For example, if a user provides $100 worth of liquidity in the Apple/Elastos pool on Tokswap, in the event the Apple token goes down in value, the user’s overall LP token value will go down and ELA will be subtracted from their liquidity. Bancor network provided great analysis on the topic of Impermanent Loss on AMM.  In addition to earning ELP tokens, liquidity providers will earn small fees from each swap on Tokswap, which in theory can offset impermanent loss given enough time.

The three fruit Tokens have no practical use but providing liquidity in exchange for LP Tokens and ELPs incentivizes participation. If people desire to participate in Elaphant governance, then holding ELPs will help the three fruit Tokens receive liquidity and trading depth, which supports ELP token price.

Jeremy
CR Press Senior Writer. Believer in the new Smart Web. In pursuit of true decentralization.