Any blockchain enthusiast within the DeFi world can say that the most exciting part of the whole investment process is seeing money legos, bit by bit, stacking over time. FutureSwap brings a new concept in terms of leveraging trades based on token and stablecoin, with results that can multiply even 20x over time.
HOW DOES IT WORK?
Futureswap works as a decentralized market maker (also known as AMM) perpetual futures platform. Users can trade any ER20 token with even up to 20x leverage, remembering all these perpetual futures have no limits of time.
Users deposit equal parts of token and stablecoin, issuing ownership shares of the liquidity pool. In this new-brand platform, users can get either long or short leverage future positions, all matched by liquidity pools.
We might remember that Futureswap also has zero slippage for any size trade, with 100% pooled assets being able to be used within the process.
For liquidity providers, the platform allows that they earn up to 100% of their deposits on trade trading fees and borrowing fees. It means that these pools can be highly efficient using the capital, hence it results in more stability and empowered high returns for liquidity providers when you compare it alongside traditional AMM exchanges.
PREVENT IS BETTER THAN REACT:
The platform counts on a unique mechanism called Dynamic Funding Rate (DFR) for short. DFR can be described as a borrowing fee based on the total trade size designed to maintain balance volume between shorts and open longs.
This will work fine in times of disproportionate demand when liquidity providers’ pooled assets will be used to take up another side on any unmatched trades. Let us say, per example, there is a ton of unmatched ETH longs. This will make liquidity providers cover the ETH, opening a short.
Both long and short volumes are all pooled. When a pool gets too “popular”, DFR is charged and its paid to a low demand pool. DFR keeps increasing as long as the disparity grows, so it can discourage trades on the popular side. So basically, we can say that shorts pay longs or vice versa till sides become proportional.
All these mechanisms are meant to prevent extreme volatility and reward liquidity providers proper, as they exposed to risk.
ARE THERE ANY EXTRA ADVANTAGES TO USING IT?
The platform has a somewhat unique reward system, which makes the experience even more interesting.
Futureswap has its token called Futureswap Tokens (FST). FSTs are non-transferable tokens that distributed weekly for traders, LPs, and referrers, according to the portion of the total trade volume, the liquidity provided, or referrals. It meant to incentivize users that contribute more to the system.
Also, traders who hold FST receive interesting discounts on their trading fees. Discounting can be as high as 30% (depending on the logarithmic curve used to calculate it) and traders aren’t required to burn their tokens to enjoy this advantage.
Referrer FST earnings are based on the closed trade volume of users referred in proportion to the total closed trade volume of users from other referrers. This means Futureswap built-in referral rewards for users who drive trading volume within the platform.
Futureswap is a decentralized market maker (also known as AMM) perpetual futures platform. Users can trade any ER20 token with even up to 20x leverage. It also has zero slippage for any size trade, with 100% pooled assets being able to be used within the process.
The platform was very well elaborated from the start, both in terms of preventing possible risks and when it comes to rewarding the most active users.
It is also correct to say that the earlier you adopt Futureswap, the more likely you are to have larger contributions to the system, hence earning more FST. So, it is obvious that later users will not have the same participation within the platform, that rewards better the pioneers who believed in the proposal from the very beginning.