The purpose behind decentralized finance is to create a censorship-resistant and bank less system where individuals can trade, buy, sell, bet, and operate financially freely. The concept sounds good and is excellent indeed, but the problem is how to materialize it into the real-world, especially for everyday people.
One of the main issues that hold DeFi back is usability. While seasoned crypto enthusiasts have enough ETH to pay for transaction fees and gas, most people interested cannot even start. Although fees are important to secure and maintain the network, it is still the main barrier for DeFi’s mass adoption.
In this sense, an India-based project promises to revolutionize DeFi and finally bring it to the masses. ZeroSwap is a multi-chain protocol empowered by zero fee and gasless transactions to ease the onboarding into the DeFi world.
What Is Wrong with the Current DeFi Landscape?
The world of decentralized finance has gone through a lot in a short period. Since the rise of Ethereum, DEXs have been the core infrastructure of this industry. Not long ago, Uniswap surpassed centralized exchange Coinbase in daily trade volume, while DeFi is boasting numbers such as $10 billion in Total Locked Value (TVL).
It is plain to see that a decentralized financial system has plenty of room left to grow even further and take a considerable size of the global market. But what precludes this much-needed expansion?
Further reading: What are the benefits of decentralized currency?
The short answer is the hardship to reach the mass adoption of decentralized finance resources as an everyday thing, just like a credit card or a PayPal account.
Existing obstacles include the high gas cost with on-chain transactions, liquidity fragmentation among countless protocols and platforms, trade fees, poor user experience, non-friendly interfaces, and lack of rapid market-making tools.
In this sense, ZeroSwap wants to outshine the existing DEXs, instead of building a new AMM, DEX, or DApp. Their goal is to create a unique aggregator in which all those platforms can leverage for gas-less transactions.
The idea is not to come up with a new DeFi product but instead rely on existing AMMs, DEXs, and DApps, reuniting their potential together for gasless and zero-fee on-chain transactions.
How Does ZeroSwap Work?
ZeroSwap is a multi-chain protocol empowered by liquidity mining, DeFi token offering, and DEX aggregation. In layman’s terms, the protocol will offer a multi-chain UI where all transactions will be gasless with zero trade fees. Users will be rewarded every time they provide liquidity to underlying DEXs.
Given that liquidity is the main issue in decentralized environments, ZeroSwap will aggregate existing protocols and provide trading routes between them, eliminating the need for users to pay gas and trading fees.
ZeroSwap is being built on top of Ethereum, Binance Smart Chain, and Elrond. The choice is based on the fact that all chains offer great composability, good traction, and enough structural maturity to support a high-level UX.
Gasless and Zero Fees – But How?
To ensure that all transactions will be gasless, ZeroSwap will use meta transactions and transaction fee mining.
Meta transactions are similar to regular network transactions but with the add-on of a proxy contract (a.k.a relayer). As the transaction is signed and authenticated, the relayer steps in to manage it and pay the gas, sending the funds to the receiving address.
Despite being used by several existing projects, no platform has tried to tokenize the idea of meta transactions with an incentivization model.
In addition, the platform will reward users with native tokens every time there is a trade (transaction fee mining) to make the protocol self-sustainable over time.
Recently, the project has successfully raised $2.2 million in seed funding (6000 ETH) backed by strategic investors and angels. This amount of ETH will serve to bootstrap the gas to the relayer on the protocol. Meanwhile, ZeroSwap will generate native tokens every time there is a trade.
ZeroSwap native token is called ZEE. The token will have four primary utilities in the platform:
- Transaction fee mining
- Governance – ZEE holders will govern the protocol changes over time.
- Liquidity mining – Given that liquidity providers are stakeholders in a protocol, users who pool in liquidity to DEXs aggregated on ZeroSwap will be rewarded with ZEE tokens.
- DEX Token Offering – ZEE holders will be allowed to participate in initial offerings through the DEX Token Offering feature. Also, the tokens will be used to enable other projects to launch their tokens.
The launch of ZeroSwap’s ZEE token was announced to happen on October 19, 2020, when the token will be launch on Uniswap and Mooniswap. The only requirement for participation is to have enough ETH to pay for a network transaction fee. The event will not have a minimum or maximum cap whatsoever.
DeFi Token Offering
ZeroSwap’s token offering platform is an innovative and much welcome feature to help other projects in the DeFi space. Their vision is to offer a simple platform where any project can distribute tokens and have a ready exchange for it.
The feature will be monitored by algorithms underline providing all users with an equal opportunity to participate in token offerings. Also, the project will issue a reputation model to prevent possible issues in terms of violating securities laws and scams.
ZeroSwap is a yet-to-launch multi-chain protocol with liquidity mining, a DeFi token offering, and multiple DEX aggregation. The purpose of the idea is to eliminate gas fees and trade fees, enabling more users to onboard on DeFi and consequently bring it to the masses.
The idea is a gasless proxy layer on top of several protocols, DEXs and DApps, to deliver a unique and user-friendly UI to enhance the end-user experience. Currently, the project is developing its structure on top of Ethereum, Binance Smart Chain, and Elron, planning to expand the support for more chains.
ZeroSwap’s ZEE token will be officially launched on October 19, 2020, available on Uniswap and Mooniswap.