Intswap

Intswap proposes an innovative AMM for the NFT market and a liquidity solution for NFT, which has the characteristics of noncustodial, higher capital efficiency and better trading experience.

Comment

Inspiration

Through out my whole career, the most impressive thing is NFT’s amazing prosperity. NFT is a brand new track. It’s now a 20 billion marketplace, innovation surrounding NFT has surged up. Among them, NFT Marketplace is a hot spot for innovation. Upon our analysis, currently there are the following main types of NFT marketplaces:

  • Highly centralized NFT Trading Platform
  • LOW NFT utilization rate & Capital Efficiency
  • Royalty Delimma
  • Insufficient Liquidity

At present, NFT AMM is an effective way to improve the liquidity of NFT. Using market makers to increase the liquidity of NFT, batch transactions can save costs, and trade at the most suitable price through the price curve.

Looking back at the growth path of DeFi, it is a complete embryonic form of today that is made up of building blocks. "Trust-free" is the cornerstone of DeFi, and the chain of smart contracts is highly transparent as a premise, so that we can have a high degree of trust, but the traditional NFT trading market cannot do this, which virtually increases the cost of entry. Today, the craze for liquidity mining has faded, but for Lego of DeFi, the evolution of the combination behind it has never stopped, and AMM is an important part of it.

Similarly, NFT AMM has initially emerged, and the transactions on the chain are highly decentralized, which solves the problems faced by the traditional market, but it is not perfect enough to fundamentally solve the liquidity problem.

If you want to really improve liquidity, you must let more NFT holders become market makers and establish a liquidity pool. On the basis of the original NFT AMM model, a new incentive model will be established around the "NFT liquidity provider" to encourage more people to provide liquidity for the market and solve the problem from the root.

It is worth affirming that the NFT AMM mechanism has a great impact on the traditional NFT market. After the construction of a new incentive model and token economic model, it will be the biggest driving force to solve NFT liquidity. This is why we do Intswap.

What it does

Intswap is a decentralized NFT AMM as well as a liquidity solution for NFTs. Compared to the existing NFT Marketplaces, Intswap has three coredesigns making it more competitive, including aggregated Liquidity Providers (LPs), Concentrated Liquidity and Liquidity Mining incentive for NFT LPs. Hence, as an innovative NFT AMM, Intswap has the characteristics of noncustodial, higher capital efficiency and better trading experience. In addition, it brings a more sustainable token economic model to NFT stakeholders.

How we built it

We have designed a suitable NFT AMM Marketplace - Intswap. This Protocol has three major features:

* NFT AMM with Intswap Providers (LPs): In Intswap, all LPs provide liquidity to NFT AMMs in an aggregated way, earn market making fees in the form of compound interest, and use an interest-bearing LP Fungible Token as the provider's liquidity certificate.

  • Concentrated Liquidity: In order to meet the trading characteristics of the NFT market, we have designed a AMM with concentrated liquidity . AMM price ranges can be set to a specific range to reduce trading slippage. In addition, price ranges are allowed to be updated during the market making process, which greatly increases the flexibility.

  • Liquidity Mining for NFT LP incentive: We have designed a modular NFT LP incentive platform and designed two specific incentive strategies. Intswap's LPs can participate in profit sharing through STAKE LP Tokens to increase their mining revenue.

Challenges we ran into

When we were doing prototyping, the challenges we encountered were the following two points:

  • How to effectively reduce the problem of AMM’s high slippage cost when dealing with NFT transactions: Unlike FT, the NFT market often maintains around 10,000 circulation and NFT is indivisible, which makes the relative size of a single transaction much larger than FT market. This poses a challenge to the bonding curve of NFT AMM, and we finally solved this problem perfectly through the solution of dynamic centralized liquidity.

  • How to deal with the NFT market with great differences: We know that there are some NFT collections, and there are great differences between individuals, which makes the intrinsic value different, and NFT AMM needs to ignore the same series as much as possible The differences between NFTs may not meet the needs of some NFT holders. However, after our discussion, we also saw the potential of NFT AMM in solving this problem, such as effectively quantifying the difference between NFTs through algorithms, and iterating on the AMM quotation system, or launching the function of order match version will effectively make up for this deficiency.

Accomplishments that we're proud of

When we finished the entire design, after several iterations, and finally completed our Demo, the sense of accomplishment is self-evident.

What we learned

For Web3, I think it is an industry full of potential. First of all, I think that in terms of its technical characteristics, the related technologies adopted by Web3 can usually solve the consensus problem among multi-party subjects with weak trust relationship at a low cost. Although the efficiency There is still room for improvement, but is being iterated and optimized rapidly. Secondly, in terms of application scenarios, I think that with the high degree of openness and interoperability of cryptocurrencies and the governance mechanism of DAO, it has great room for innovation in native application scenarios, such as DeFi, NFT, etc. Application optimization also has great potential, such as low-cost cold start guidance, brand building, and maintenance of loyal user communities. Finally, I think that in the future development of network technology, in addition to improving efficiency, ideological network will become an important topic. As the network accounts for an increasing proportion of human social life, more and more users will choose network products Consider the ideology it conveys, and Web3 provides a relatively complete network ideology theory and practical technical solutions. Its propositions of de-authority, multi-point collaboration, and privacy protection are also in line with my judgment on industry development.

What's next for Intswap

Next, we will complete our MVP and start our testnet activities, and use this as the beginning of the cold launch. Of course, we believe that there is a strong complementarity between Intswap and Sushiswap. We hope to get more opportunities to discuss.

Share this project:

Updates