- SmarDex will redefine the current decentralized exchange system with its innovative features.
- Understanding how SmarDex solves the problem of impermanent losses
The modern crypto domain has seen significant changes over the years, and the developments are still on a spree. Crypto exchanges around the globe are facing similar issues of centralized money monitoring practices.
Crypto enthusiasts hesitate when an exchange ties their money to a single authority. Centralization thereby makes user credentials and assets prone to external anomalies.
Hence, to solve this issue, DeFi exchanges emerged. In a decentralized finance exchange, no institution has central authority to look into the digital assets records. As the data broke into blobs and stored in chained blocks, forming a network; DeFi exchanges solved the persisting issue.
But these decentralized exchanges are also facing an issue bigger than centralization. DeFis across the world are now facing the problem of impermanent losses. So to solve this, a new exchange has emerged, which can revolutionize the entire DeFi system we see now.
SmarDex is an innovative decentralized finance exchange functioning on open-source smart contract execution. This platform lets users work directly on their assets without worrying about data centralization.
SmarDex is an autonomous market maker (AMM), which lets users provide liquidity in the platform in return for a rewarding fee or token. Users can exchange their ERC20 tokens for a substantially lower charge due to SmarDex’s AMM framework.
This open-source smart contract platform reduces the scope of impermanent losses by using Fictive Reserves (FR). Fictive reserve tries to balance the price rise and fall and replace the K constant rule used by other exchanges.
To do this, SmarDex uses two FRs. These FRs automatically check which token’s price is rising and limit the user to sell the token at the current lower price. Thereby, the user can earn potential impermanent gain by selling their token at a higher price later and reducing impermanent losses.
Not only this, but SmarDex also provides Liquidity Pools (LP) which let users generate passive income when they stake their tokens on the exchange and provide liquidity. These liquidity pools work collectively with fictive reserves to help liquidity providers save themselves from impermanent losses.
SmarDex has its cryptocoin named SDEX. SDEX’s current price is $0.005074, representing a 4.01% decrease from its May price. The total supply of SDEX is 10,000,000,000 coins. During the last 7 hours, the price fell from $0.005243 to $0.005052.
Furthermore, the DeFi platform will transition into a deflationary model to grow exponentially. This way, all the SDEX tokens available on other blockchain networks will be burnt, and staking will remain available only on the Ethereum network.
SmarDex plans to become DAO soon and will allow its Ethereum-based users to vote on fees of different liquidity pools.Furthermore, the exchange will implement a dynamic model. This model will encourage competitiveness between the token swappers and maximize the returns for liquidity providers.
For this, SmarDex will focus on maintaining a single pool per pair. These individual pools will optimize the pair fee to achieve optimal SDEX burn per transaction.
Final Thoughts
The future of SmarDex looks promising as the platform is working persistently in redefining the current DeFi system. The platform’s innovative features and tools are already disrupting the obsolescence of traditional DeFi exchanges. However, what’s interesting to see is the advancements that SmarDex will bring in the coming years.
Leave a Reply