Today, we take a look at a brand new cross-chain AMM and DEX, Chainflip, and how it excels in comparison to Thorswap.
Fast forward to today, the landscape has changed. New projects that offer better products and services are emerging. In this article, we’ll talk about one such project: Chainflip.
In short, Chainflip is a Automated Market Maker (AMM). It’s also a cross-chain Decentralized Exchange (DEX). This means that with Chainflip, you can swap assets between chains. For example, between native $BTC on Bitcoin’s network to $ETH on Ethereum.
So, what technology powers the Chainflip DEX? In a nutshell, it uses the unique Just-In-Time (JIT) AMM. With this, the DEX can provide users with low slippage cross chain swaps. It does this by using JIT market making strategies for Liquidity Pools (LPs). In turn, users like you and me save on fees during swaps. Aside from low slippage, Chainflip provides other benefits as shown below.
With its capabilities, Chainflip is in direct competition with Thorswap. To re-cap, Thorswap is Thorchain’s native DEX. With Thorswap, you too can swap native crypto assets across different chains. But, why is Chainflip better than Thorswap? To explain this, we’ll refer to the tweet below.
Firstly, the JIT AMM is more capital efficient compared to Thorswap’s. Simply put, the JIT AMM enables:
This greatly improves the user experience with the JIT AMM.
Secondly, Chainflip has a better cryptographic signing scheme. A.K.A. Flexible Round Optimized Schnorr Threshold (FROST). On the other hand, Thorswap uses a GG20 scheme.
To avoid getting too technical, we’ll sum it up for you. One, FROST allows for faster signing times than GG20. This means that users do not wait as long for signing. And two, FROST has better scalability. This means validators need not run expensive hardware to secure the network. This leads to more validators joining the network. In turn, this improves the network’s security and decentralization.
Thirdly, Chainflip’s native token, $FLIP, has better staking options. Now, Thorchain has its own native token, $RUNE as well. Both tokens have the same important utility. To serve as a staking token for validators. In fact, they need large stakes to even become a validator. Sadly, this prices out small retail investors who want to stake tokens.
However, with $FLIP, investors have a liquid staking option. And that’s already built even before the $FLIP token has launched! Indeed, users can soon stake their $FLIP with stakedflip.fi. Then, they’ll receive a Liquid Staking Derivative (LSD) token. This represents the user’s stake and with it, users can earn a steady yield.
Moreover, Chainflip has announced a huge $1 million liquidity program! By providing liquidity, users can earn rewards in $FLIP. That’s a pretty good strategy to onboard new inflows to the ecosystem.
To conclude, Chainflip’s really gearing up to succeed. It’s already showing clear signs that it’ll outperform its predecessor, Thorswap.
For now, the project is still at its early stages. Both its mainnet and the $FLIP token have yet to launch. But, we do have to say that the team has been making the right moves up till now. To stay on top of this new project, you can follow its Twitter account here.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
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