Where is the Tangleship heading?
Leaving Earth's Orbit
Our initial goal is to provide IOTA, Shimmer and Assembly users with an extensive set of DeFi tools that already exist in other ecosystems, removing the need to leave the network in order to enjoy the benefits of this novel kind of banking.
At the very core of our ship are two fundamental elements: Swapping, and Liquidity Pools. At launch TangleSwap will further provide Asteroid Farms and Staking Fields. Additionally, we are adding exclusive functionality with a pioneering DEX product: NFT Stations.
We will not stop there though. Over time, we will be steadily expanding the DeFi 2.0 toolset available to our brave explorers. Details on future explorations can be found in our Tangleship section below.
Our long-term vision is to become a fundamental piece of the vibrant Tangleverse, by enabling a prime web3 experience characterized by an enjoyable, smooth & gas-free UX (user experience).
A typical explorer, Crypto Jane Doe, may jump aboard the Tangleship and:
- Seamlessly log in through her personal, ubiquitous IOTA domain
- Quickly check on her $VOID yield farming & staking profits
- Swap a bit of her airdropped $ASMB & $SMR to become a liquidity provider at the latest IFO
- Use her preferred currency to buy the latest Utility NFT, which is offering promising opportunities
- Readjust her governance tokens to cast a vote on an upcoming DAO proposal
Now, what makes the TangleSwap spacecraft unique? What key differentiating factors set it apart from other DEXs out there?
To begin with, by developing our decentralized protocol on IOTA, we are already taking traditional DeFi one step further by building on a completely new category of cryptographic network. Unlike traditional DLTs (Distributed Ledger Technology), IOTA’s Tangle is not a Blockchain, but rather a so-called DAG (Directed Acyclic Graph). Recognizing early on that traditional sequential blockchains would not be able to cope with world-scale demand, the IOTA Foundation engineered a highly sophisticated consensus algorithm that settles transactions in parallel, thereby providing the grounds for a completely feeless, fast, secure and scalable Layer 0 solution. This enables IOTA to become the backbone not only of the IoT (Internet of Things), but also of the broader web3 ecosystem. Building on such a novel DLT comes with its own challenges and hurdles — after all you are exploring previously uncharted territory. In addition to being natural explorers at heart, we have decided to build our suite of products on IOTA, as we believe that only the above-mentioned benefits will truly unleash the full potential and possibilities that come with DeFi and the global web3 space.
In practical terms, the lack of underlying gas fees puts TangleSwap in a very unique position, where users can freely move their assets in and out of Liquidity Pools, Asteroid Farms, Staking Fields, and NFT Stations without paying any sort of protocol fees whatsoever. The only permanent fee incurred in TangleSwap is the absolute most essential one for the operation of an AMM DEX: the trading fee, paid by 'taker' users when trading assets, and used to reward other 'maker' users (liquidity providers) for providing the necessary liquidity.
Not only is IOTA—and by extension TangleSwap—free of gas payments, but the Tangle technology also prevents the infamous concept of MEV (Maximal Extractable Value). MEV exploits occur typically via DEX arbitrage, liquidations, and sandwich trading, using bots that benefit from altering or manipulating the chronological order of transactions. This issue is so prevalent in blockchain-based systems that you may not even be aware that it has affected you previously — the only way to mitigate it is by adjusting transaction slippage as much as possible, making it difficult for MEV bots to operate in illiquid markets. At the time of writing, more than $600M USD have been sniped from traders in Ethereum MEV attacks. For IOTA, this number will forever remain at $0 USD.
On top of pioneering a gas-less and MEV-free DeFi experience, our crew of pilots is also building a considerable amount of TangleSwap-exclusive innovations, rarely or never seen before in the space of AMM DEXs:
- Supernova Vaults, our very own brainchild: self-regulated mechanism to adjust inflation rate based on bull/bear market cycles
- NFT Staking, empowering users to generate additional passive yield on their non-fungible tokens
- Utility-driven DEX-native NFTs, deeply integrated with diverse aspects of the protocol via 6 different DeFi utilities
- Trading discounts, according to tiered holdings of our utility token
- Token burn mechanisms fueled by organic protocol revenue and NFT royalties, which scale together with DEX popularity
Finally, we would like to conclude with a non-exhaustive list of future implementations. These have already been planned but not yet fully-fleshed out, as we opted instead to focus on the crucial features making for a seamless V1 experience of the DEX and concentrate on further features at a later time, when the DEX has been successfully operating and has properly established itself at the core of the IOTA DeFi ecosystem: Long-term Token Bond structures, Protocol-owned Liquidity, Lend/Borrow functionality, Stablecoin launch & backing, Concentrated Liquidity, Impermanent Loss Protection, Hybrid Orderbook models...