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WOWswap swap page on OKEx Chain
Inspiration
Not so long time ago leverage trading was an exclusive domain of highly-trained investment professionals. Crypto has changed this forever — currently, all major cryptocurrency exchanges offer margin trading accounts. On centralized stock and cryptocurrency exchanges traders borrow addition capital from brokers and exchange operators who decide on lending rates, fees and procedures for liquidating risky leveraged positions. However, on centralized trading platforms their operators have full control over leveraged trading rules, including decisions on capital lending rates, assets, available for leveraged trading, and liquidation procedures.
WOWswap democratizes leveraged trading further by giving all power to the community. With WOW protocol liquidity providers can create and operate common liquidity pools, and traders can borrow these funds for their leveraged trades according to the rules collectively established by WOW token holders.
In decentralized finance (DeFi) leveraged trading also should be decentralized: community needs to be able to create and operate common liquidity pools and decide on leverage trading rules. WOWswap is a community-run protocol for leveraged trading on decentralized cryptocurrency exchanges. Using WOWswap’s smart-contracts individual liquidity providers operate common liquidity pools, and traders use these funds to finance their leveraged trades on decentralized AMMs such as Uniswap and Pancakeswap.
All critical protocol’s parameters such as tokens approved for leveraged trading, liquidation margins, insurance fees, liquidation rewards, lending rates, fees for traders and liquidity providers are collectively decided by holders of WOW token – the protocol’s governance token.
What it does
On Okex Chain WOWswap works on top of CherrySwap DEX. Using WOWswap’s smart-contracts individual liquidity providers create and operate common liquidity pools, and traders borrow these funds to finance their leveraged trades on CherrySwap DEX.
If the price of the token that a trader buys goes up, the trader receives a multiplied profit. However, if the price of the token goes down the trader suffers a multiplied loss. When a trader closes a leveraged trading position, the liquidity pool receives back the borrowed funds plus the accrued interest.
If the token price goes below the liquidation threshold, then anyone can become a margin caller by triggering the liquidation of the trader's position. In this case the trader will lose all capital invested in the trade, and the margin caller gets the rest of the funds as a reward.
WOWswap allows to borrow additional capital in $OKB and $USDT to buy other tokens with leverage. At launch over 5+ tokens are supported.
How we built it
First, we started with a vision to build a decentralized, permissionless, and user-friendly platform that will be as simple as Uniswap but will have additional features such as leverage, short-selling, and limit-orders. We also wanted to create a community-governed protocol, so that all protocol’s parameters can be set by users rather than some central authority.
Second, back in January 2021 we build a simple landing page explaining our vision and roadmap. As soon as we published it and shared with some friends and colleagues, our community started to grow very quickly as it turned out our product was needed by many people. A week later we completed our token sale (closing the hard cap in 9 seconds) and secured necessary funding for building the product.
Third, we found and onboarded top-class engineers. Our technical team consists of highly skilled professionals who are very passionate about writing elegant, clean and efficient code. In the past, they won numerous hackathons and have many years of experience with solidity, rust, and different blockchains.
Forth, on our main page we published a countdown – 45 days from toke sale to production. Those 1.5 months we worked 12-18 hours every day, mostly without weekends. And we kept the promise to our token holders by launching the product on the declared date – the 12th of April 2021.
Fifth, over the last 8 months we were making improvements, fixing bugs, and adding numerous features. It’s faire to say that we rebuilt the protocol completely since the first launch. We expanded the protocol to 8 chains and listed over 100 tokens for leveraged trading. From the business perspective, we significantly expanded our team, and formed many great partnerships with other projects, DEXes, marketing companies, investors and influencers. Currently, our product is very strong, battle-tested, and ready for mass adoption.
Challenges we ran into
Building a protocol from scratch was a challenge because we had to create a totally new product, inventing algorithms, and math behind them. For example, most leveraged trading platforms require users to deposit some collateral before making the trade. In WOWswap, no collateral is required because WOWswap automatically turns purchased tokens into the collateral.
Creating our own protection against flash loan attacks. Many DeFi protocols were victims of flash loan attacks, therefore most leveraged trading platforms use chainlink oracle price feeds. The downside of this approach is that Chainlink provides price feeds only for major tokens that can be traded with leverage on many centralized exchanges. Creating our own protection against flashloan attacks was a technical challenge but it allowed us to list many tokens for leveraged trading.
Expanding and maintaining the protocol on 8 chains. When we initially built WOWswap on BSC we did not expect it to become a truly multichain project. On BSC WOWswap has over 150 smart contracts, integrates with Pancakeswap DEX, and has onchain DAO with staking rewards. Now, imagine expand this to other 7 chains, making integrations with 7 other customized AMMs, making price feed bots and liquidation bots for other 7 chains, bridging $WOW tokens to other chains and making 7 other DAOs, etc.
Accomplishments that we're proud of
WOWswap has been running on EVM compatible blockchains since April 12, 2021. Since then we have succeeded in the following areas:
Ranked #1 platform by the number of supported assets (over 100 tokens across 7 chains) Integrated into the UI of Pangolin DEX (Avalanche) and Mimo DEX (IoTex) Fully audited by Hacken, running 6 months without incidents TVL > $2,000,000 Integrated with Pancakeswap, Quickswap, Pangolin, Sushiswap, Mimo, Mdex, Serum In DeFi we are proud of the following achievements:
Launched on 6 EVM compatible blockchains. No collateral deposit is required before opening a trading position Leveraged trading for fractionalized NFTs All protocol’s parameters can be changed instantly via on-chain governance First onchain referral program with referral payouts paid by a smart contract
What's next for WOWswap
1 Launching Limit Order
Limits orders include Stop Loss and Take Profit. This will enable users to open a position with an exit strategy planned ahead. By enabling take profit, WOWswap also adds a unique feature to CherrySwap users because WOWswap also allows to trade tokens without leverage, so users can take profit when it reaches the predetermined percentage.
2 Launching WOWswap Pro
Wowswap interface is minimalistic and is extremely easy to use. In fact, opening leveraged short or long position takes just 1-click. Yet we recognize the demand for more professional trading experience to maximize those gains, therefore, we will soon launch WOWswap PRO to include more trading data, always-on chart and possibility to open a position and follow the portfolio in one page.
3 Analytics page release
For all the data freaks, statistics page will display TVL, trading volume, total fees collected, interest rate changes as well as liquidation volume and trading volume changed per token.
4 Efficient capital utilization — launching WOWswap Yield Aggregator
At the time of writing, APY on BNB and BUSD is 26% and 46%, respectively with only 17%+ percent of the pool utilization ratio. It means that more than 3/4s of the pooled assets are sitting idle.
To increase pool utilization efficiency we will launch WOWswap yield aggregator to farm rewards from other protocols. Adding a yield farming strategy could generate extra 10% to 15% extra APY to WOWswap liquidity providers. In the future, the same technology could be applied for proxy-tokens, which are pegged 1:1 to the underlying tokens and are held by WOW’s smart-contract on your behalf.
5 Enable WOW burn and reward distribution
Every time a trade makes a profit on a leveraged position, WOWswap protocol charges a fee of net profit made by traders, which is adjusted by the governance. Currently the fee goes to WOWswap treasury, but very soon we will start to burn WOW tokens and distribute the rest of the protocol’s revenue to xWOW holders.
6 Launch Phase 2 of WOWswap governance — WOWswap Improvement Proposals
WOWswap On-chain Instant governance is live on selected blockchains, but some changes to the protocol require manual interference. Therefore, in the next phase WOWswap Improvement Proposals (WIP) portal will be launched where xWOW holders will be able to propose new tokens for listings, adding new features to the protocol, propose/vote on adding new charities for donations and more.
7 UI/UX Optimization
Even though the user interface on WOWswap is simple and is easy to use, there are a lot of moving parts under the hood that need to be improved, optimized and polished to make the experience as flawless as it can be. In the next few months we will focus on improving the UI experience, especially, for mobile users.
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