Algorand is one of the most reliable and efficient cryptocurrencies available. It has the potential to be a top ten position in the market cap rankings. Its ecosystem is fast developing, and Tinyman is another step in the right direction.
Tinyman is a decentralized trading system that uses the Algorand blockchain’s fast and secure infrastructure. It creates an open and secure marketplace for traders, liquidity providers, and developers.
The exchange is completely decentralized and does not have a custodian. Funds are stored in smart contract accounts without permission. This means that the smart contract specifies the only methods for withdrawing funds from pool accounts. This code, at a high level, only allows withdrawals in exchange for an appropriate amount of another asset or by liquidity owners in exchange for their Pool Tokens.
Contracts are also completely permissionless. This means that by issuing the appropriate combination of transactions, any account can create a pool. Also, this means that no account has power over the assets or functionality of the pool. Furthermore, there is no way to reverse or modify transactions, even if they were made in error.
What you can do with Tinyman?
Algorand provides extremely cheap and almost instant transactions. It makes it an ideal blockchain for developing a DeFi protocol. You can relocate your Algorand and make swaps without paying high fees like you would with Uniswap or PancakeSwap. It is a completely permissionless system that allows Algorand assets and LPs to trade via Automated Market Makers.
On the platform, there are two kinds of activity and users: those who want to swap tokens and those who want to offer liquidity to participate in Liquidity Pools. Those who participate in the pools will receive a percentage of the transaction fees when people engage in any swaps in exchange for providing liquidity.
How does Tinyman work?
Many DEXes on Ethereum are almost unusable for regular people due to the enormous gas fees there. That makes it only profitable to use if you are trading large sums of money. Algorand does not have this issue because its gas fees are small. As a result, Tinyman is pretty cheap to use and will not burn a hole in your pocket. Tinyman is a DEX for the smallest traders.
A basic overview of the Swapper and liquidity providers:
- Swapper: Users that swap between different ASA or Algo are charged a very small cost for their swap request. To trade, customers simply link their Algorand wallet to the Tinyman platform via WalletConnect and do the swap.
- Provider of Liquidity: To complete the swap, there must be liquidity in the pool. In most cases, the liquidity pool will contain equal amounts of both tokens. Assume that token A is worth twice as much as token B. If there are 50 A tokens in the liquidity pool, there will be 100 B tokens. A liquidity provider is now someone who has sent an equal amount of both tokens A and B into the pool. Why would he do such a thing? Because he will receive a percentage of the fees the swapper pays from the liquidity pool. Earnings are directly proportional to the amount of liquidity you provide in comparison to total liquidity in the pool.
Tinyman’s start to the year was not ideal. A zero-day attack occurred against several of Tinyman’s pools, taking advantage of a vulnerability in its contracts. The attackers maliciously took the goETH and goBTC from the pools. Further attacks on numerous more pools meant the draining of more ASAs. As soon as the team became aware of the attack, they began spreading the information across all platforms, asking users to remove liquidity from the pools.
Tinyman announces Bug Bounty Campaign on @immunefi !
We're optimistic that Immunefi’s developer community can contribute to the safety of our new version v1.1 smart contracts by adding another layer of community auditing.🦾
— Tinyman (@tinymanorg) January 21, 2022
They started a new complete bug bounty program, and a compensation program to pay those had losses. After fixing the bug, the contracts updated to v1.1, and Tinyman v1.1 became available to the public. Tinyman v1.1 came out in mid-January.
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