Samuel Wan · 1 day ago · 2 min read
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RSKSwap DEX, has been recently announced by the developer ecosystem.
RskSwap is an automated market maker that relies on mathematical formulas to set the price of a token. This allows users to swap ERC20 tokens instantly charging a 0.3% fee. This fee goes to the liquidity providers (the users that locked their tokens on Uniswap to get revenue from these fees).
As stated on RSK’s announcement:
“Any ERC20 token can be listed on RskSwap. No permission is required. Each token has its own smart contract and liquidity pool. If there is none, it can be created easily. Once a token has its own exchange smart contract and liquidity pool, anyone can trade the token or contribute to the liquidity pool while earning a liquidity provider fee of 0.3%.”
Pool tokens are created whenever funds are deposited into the pool and as an ERC20 token, pool tokens can be freely exchanged, moved and used in other dapps. When funds are reclaimed, the pool tokens are burned or destroyed. Each pool token represents a user’s share of the pool’s total assets and share of the pool’s 0.3% trading fee.
Liquidity providers are rewarded with fees on trades. Incentivizing users to contribute to underlying liquidity pools and offering them a unified, easy-to-use token swapping protocol, RSKSwap could provide an important boost to decentralized exchanges.
Even though centralized cryptocurrency exchanges provide many useful features for end-users, DEXEs have seen exponential growth during 2020.
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