LaunchZone SwapX – The Ultimate Solution for Low Liquidity and High Price Slippage of Decentralized Finance
Most Automated Market Makers (AMMs) in the market face three main challenges: high fees (compared to centralized crypto exchanges), low liquidity, and high price slippage. The AMMs on Ethereum blockchain could not function very well in some market conditions, which brings about absurd transaction fees together with low liquidity and high slippage. Other AMMs on Binance Smart Chain (BSC) has lower fee, faster transaction speed, but still suffers from low liquidity and high price slippage. Also, as BSC is a relatively new public blockchain, it needs some time to develop cross-chain solutions and dApps that are more popular than those on Ethereum.
As an advocate for BSC, LaunchZone Ecosystem is committed to providing an ultimate solution for DeFi by building a new generation of AMM called LaunchZone SwapX. LaunchZone SwapX uses Cross-Chain Layer 2, LaunchZone’s unique technology, to automatically acquire the best pricing available for cryptocurrency swaps on BSC.
Link to LaunchZone SwapX: https://swapx.launchzone.org/#/
LaunchZone SwapX is the key product of the LaunchZone ecosystem. It is similar to Binance’s Liquid Swap, but it is a decentralized, trustless, and non-custodial application on BSC. While Binance’s Liquid Swap is a centralized service that supports swapping between stablecoins and fiats, SwapX supports more stablecoin and cryptocurrency pairs. SwapX users can easily swap among BUSD, USDT, and many other tokens. SwapX automatically finds the best rate and liquidity to facilitate the transactions of users. On 16th January, 2021, the total liquidity that SwapX can take advantage of is over 200 million USD.
The problem of high price slippage is closely tied with market depth and measures the difference between the expected price of a trade and the price level arrived at after execution. High price slippage typically indicates a market is less liquid. As consequence, users of BSC and Ethereum cannot execute an order with high volume without causing a big slippage.
SwapX solves the problem of lacking liquidity and facilitates transactions with minimal slippage by using our unique technology called Cross Liquidity Layer 2.
LaunchZone’s Aggregating Engine will find the AMMs with the best liquidity among BSC’s AMMs to divide, match, and execute user’s orders. The Aggregating Engine will divide an order into many parts and execute each part in a different AMM to lower the risk of price slippage.
For example, a LaunchZone user wants to swap 2000 BUSD to BNB. The price slippage of BakerySwap for 2000 BUSD in trading volume is 0.2%. Each $500 in trading volume will cause a 0.05% slippage in price. While PancakeSwap slippage is 0.12% and a $500 in trading volume will cause 0.105% slippage. Our LaunchZone Aggregating Engine will calculate and divide 2000 BUSD into two smaller orders. One order of 1363.636 BUSD is executed on PancakeSwap and another order of 636.364 BUSD is executed on BakerySwap. The total price impact/slippage is 0.097%, much lower than executing an order on just one single AMM.
This example shows the advantage of LaunchZone SwapX compared to other AMMs. This makes LaunchZone the best option to trade small and low cap cryptocurrencies on BSC.
At some points, due to crypto market volatility, buying and selling BNB on LaunchZone SwapX is even more profitable than trading BNB on Binance.
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