Swapping from one stable coin to another is one of the most done things in Defi these days. But when you go from Dai to USDT or UST to USDC you won’t always get a precise 1 to 1. This comes from a more complicated system behind the Defi protocols that have to balance the liquidity of the tokens and their current demand. Making this so-called slippage zero is not really possible. But it is possible to make it as low as we can. At least lower than the current Defi protocols do.
To solve this problem Wombat came about with a new and better algorithm that makes it cheaper for users to swap between stable coins. But also more user-friendly for the people swapping and the people that provide the liquidity for the Dapp.
What makes Wombat different?
Liquidity pairs and not just solo liquidity
One thing that Wombat does to make their user experience better and the slippage lower is by destroying the old model of specific liquidity pairs. This is the current model most stable swap protocols like Curve uses these days. With Wombat you do not have to lock your stable coins in a specific token pair like USDT to Dai. But instead, you can lock a single stable coin in the liquidity pool.
This approach makes it so that the liquidity does not have to be spread out over multiple pairs. But instead, can all be together in one giant pool. This in combination with their unique algorithm creates a lower slippage for token swaps.
Open liquidity pool for multiple tokens
Not only does a system with pools like these create a lower slippage. It also gives more opportunities for adding more different stable coins easier. As adding a new stable coin to the protocol does not need a new liquidity pair. So if you want to swap from a “new stable coin” to USDT. You will not have to add extra USDT to a specific pair. As you already have USDT locked in the protocol.
Why is there a price difference between stable coins?
Well, it’s simple. The price of stable coins changes all the time. This comes from the fact that some of them are just more popular than others. This can come from simple trends. But also from the fact that some just have more demand for it. This demand usually comes from the use cases of the token and if it can be used for certain trading pairs etc.
For this exact reason, it is super important to be able to easily swap between them as the world won’t just simply switches to one single stable coin. And of course, when you swap between then, especially at large amounts, you want to do so at a price as close to 1 to 1 as it can be.
Bad user interface
A very common thing we see these days when swapping or providing liquidity for stable swap Dapps, is that the interface looks, well… not so good. This is not only a design problem but also originates from the hundreds of liquidity pools people can add to.
Wombat dramatically improves on this. Not only with a better design but also because of the single token provision. This makes it easier to understand. And you as users will not be confused by all the different pairs you could provide liquidity too.
Like any good Defi protocol, Wombat has its own token, the WOM token. The WOM token can be used for all sorts of things related to the Wombat exchange. With first of all its governance. Holders of WOM can participate in the governance of the exchange by voting for any proposed changes and additions to the protocol. Giving the ultimate power back to the people and the supporters of the Wombat exchange.
As second holders of the WOM token can stake it and earn interest on it. Because a part of the fees taken by the Wombat exchange will be distributed to the stakers of the WOM token. Making it lucrative to hold and stake WOM.
Those were the 2 main features of the token. But it can also be used for whitelisting and priority access to wombat incubation labs project launches in the future. And Discounted opportunities for projects.
A good project is only as good as its team. So let’s take a look at the Wombat founding team.
Alex Lee – Founder & Wommander in Chief
Alex has been a quant trader and blockchain engineer expert with extensive experience in crypto, project management, and portfolio management.
Daniel Chan – Chief Technology Officer
Daniel is a crypto OG and blockchain engineer with an entrepreneurial background ranging over Defi, banking, and social enterprises.
Raymond Wong – Chief Marketing Officer
Raymond is their marketing expert with many years of experience in crypto and traditional finance. He is skilled at scaling projects from inception to operation.
Mr. Duckbill – Advisor to Wombat
He is the founder of Platypus Finance, bonafide crypto OG, revolutionary tokenomics designer, and loyal friend to Wombat.
These 4 are the backbone behind Wombat swap and are sure worth a follow if you want to follow the process of the Wombat exchange.
Investors and Partners
When looking at a new project on the market it is always super important to look at the team. But also at the money behind the team. In the case of Wombat, this is quite impressive. With investors with large names like Binance Labs, TPS Capital, ZOKYO, and Silverstone behind them. Altogether they already raised a Series A funding round of $5.25 M. Which should give them enough funding to work on the project for quite some time.
This shows that the project has the means and the capital to keep on building for some time. Besides the fact that all these big players obviously have some trust in them. If you want to see the other firms that invested in Wombat click here!
Future of Wombat
Wombat just came out of the womb and still has to launch its main net version to the BNB Smart Chain (BSC). Or they might already be live by the time you read this. But although Wombat will start on BSC they look much further than that.
As the world becomes more and more multi-chain Wombat plans to evolve with it. So shortly after their main net launch on BSC, they will also integrate their protocol on multiple other EVM blockchains. Starting with the likes of Polygon, and EVMOS. More other EVM blockchain will follow soon after said their founder Alex Lee. As the protocol grows and becomes a true multi-chain stable swap protocol.
If our article about Wombat interested you, then do not forget to check out Wombat’s Website.
If you have not yet added the BNB Smart Chain to Metamask? Then check out “How to add BNB Smart Chain to Metamask” Here!