OneSwap: To Break the Ceiling of DEX


New Member
Aug 28, 2020
On March 27, Vitalik tweeted: "Things Ethereum has in 2020 that it did not in 2017." He mentioned DeFi products represented by Uniswap as well as MakerDAO and Loopring as the benchmark of different types of DEX.

Up to now, the trading volume of DEX in August has exceeded US$9 billion, an increase of 197% from July. Uniswap, in particular, contributed the biggest share of 55.3%, closely followed by Balancer (16.5%) and Curve (15%).

Amid the rush, the Uniswap has launched the ERC20/ERC20 liquidity pool, automated market maker (AMM), oracle and lightning exchange functions; and the order book-based Loopring has also been strongly recommended by Vitalik and the Ethereum community. They both advance triumphantly in their respective segments. Yet efficient as UniSwap is, its AMM is faced with such defects as slippage, and the convenient Loopring order book is quite sensitive to market liquidity. Market opinions on the two are mixed.

So if there were a product integrating advantages of the two by offering efficient transaction protocols between CEX and DEX and enabling high-speed circulation, and it would be the next hotly contested platform. OneSwap, backed by CoinEx, will be the one.

Being the first with comprehensive advantages, OneSwap has made a breakthrough in DEX!

Investors worldwide have long been suffering from the slow transaction processing and high transaction fees of Ethereum. Also, driven by investors’ vision and strong demand for an innovative DEX, OneSwap was designed to introduce an on-chain order book based on AMM that supports both market orders and limit orders. In this way, users can buy and sell orders according to the target price. In addition to permission-free token listing and automatic market making, OneSwap further improves user interaction through the built-in OneSwap Wallet and allows the deployment of all smart contracts. OneSwap is a master of diversified advantages, committed to providing users with a fresh new experience of DEX.

OneSwap's new architecture design after in-depth research

Having gone deep into the AMM project model in the industry, OneSwap bases itself on Uniswap's Constant Product Market Maker (CPMM) and also supports transactions between all tokens that meet specific standards; under the CPMM model, it is expected when the remaining liquidity providers create a fund pool for two assets, they will create a specific fund pool by investing an appropriate amount of the two assets based on the current market price. For example, when the ETH to USDT ratio stands at 1:350 in the market price, the ratio between the amount of ETH and USDT injected into the fund pool will also be maintained at this level, say, 10ETH:3500USDT. Users can inject liquidity into OneSwap's fund pool of the trading pair with their idle digital assets, and then earn transaction fees as liquidity providers.

Each fund pool in OneSwap comes with an equity token, and users who inject liquidity into the fund pool will receive the corresponding equity token as a proof of equity to withdraw the funds. When each fund pool responds to the exchange transaction request, the product of the two tokens x and y in the fund pool remains a constant: x*y=k. This formula is easy to understand as it represents a situation where no transaction fees are charged. Beyond that, k in the CPMM model will keep rising.

It is worth mentioning that OneSwap has also introduced an "order book" model which allows users to initiate both market orders and limit orders. When processing a market order, the Pair contract will compare the optimal price in the order book with the AMM price, and try to respond to the transaction request at the best price. Part of the market order that cannot be traded will be processed in time through the CPMM model. Limit orders that meet the conditions will be processed timely based on the price fluctuations of the CPMM. Pending orders are temporarily saved in the on-chain order book for the next processing. Everything centers on users’ convenience for setting the best deal.

The OneSwap architecture is shown in the following figure:

When liquidity providers inject digital assets such as ETH into the fund pool, the Pair contract will return new tokens based on the current total amount of the fund pool, the total amount of equity tokens that have been issued, and the amount of funds injected this time. When they want to withdraw the original digital assets, they can go through the above process.

Besides, the OneSwap development team has meticulously improved the data structure for the Pair contract, controlling the transaction gas consumption to the same level as in UniswapV2 or even less under certain circumstances. That makes for an upgraded version of UniSwap with negligible transaction fees.

Besides its market-making engine and order book, OneSwap is also equipped with important modules as follows:
  1. Router protocol
For the calculation of AddLiquidity and RemoveLiquidity funds;
  1. Token issuance and management modules
For the issuance of ONES and for airdrops and burns. Even if the logic of market making and order book is upgraded, the original logic of the token remains unchanged; OneSwap is also equipped with token issuance and management modules where users can edit general authority such as the name, total amount, additional issuance, burning, and freezing, as well as lock-up and C2C functions;
  1. Token repurchase module
For withdrawing the transaction fees as revenues to the project developer (non-liquidity provider) from each pair. These revenues are for repurchasing and burning ONES;
  1. On-chain governance
Any address with a voting share greater than 1% can initiate a proposal, and the execution of the proposal is under control of the on-chain logic; opinions on the text are solicited through the voting system, a reflection of its commitment to decentralization;
  1. Lock-up module
For saving the ONES held by the project developer and releasing it regularly;

OneSwap's new community governance concept and incentives

The OneSwap project was initially implemented and deployed on Ethereum. To facilitate on-chain governance and encourage community development, OneSwap on Ethereum will issue ONES, an ERC20 governance token, for liquidity mining, transaction mining, and on-chain governance voting, and meanwhile, support the transfer of ownership and a blacklist mechanism. The total amount of ONES is constant at 100 million, of which 50% is used as a community fund to support the construction of the OneSwap ecosystem and 50% is owned by the OneSwap team. 5% of the total ONES owned by the team will be unlocked initially, and the rest will be unlocked at a rate of 5% every six months until all is unlocked after four and a half years.

Efficient and transparent on-chain governance solution

Operations of the governance agreement can be carried out through proposals that will be voted in the community. Users with a sufficient amount of ONES tokens (more than 1% of the total tokens) can initiate a proposal, and any user who holds ONES can vote for or against the proposal. The voting lasts for three days, with one token for one vote. Proposals receiving the majority of votes prevail.

To ensure the transparency and credibility of OneSwap, part of the ONES in the community fund is managed by the governance agreement, and the ONES held by the team is unlocked by the lock-up agreement. 50% of ONES, upon creation, will be immediately transferred to the governance agreement, and the other 50% to the lock-up agreement. According to the unlocking rules, the lock-up agreement will immediately release 5% of the total ONES to the OneSwap team.

After receiving the initial tokens, the OneSwap team will initiate OneSwap's first proposal: applying for ONES, as appropriate, from the community fund to support "transaction mining" and "liquidity mining", with the application amount set as the proposal parameter. Both users who inject liquidity into the fund pool and users who trade with it have the opportunity to gain ONES as incentives.

ONES repurchase and burning

OneSwap charges the Taker a fixed percentage of transaction fees based on the transaction amount, while the Maker does not need to pay. The transaction fees generated in the Pair contract are divided into two parts: 60% directly going to liquidity providers and 40% for repurchasing and burning ONES. In response to market dynamics, OneSwap allows users to change the transaction fee rate within a certain range.

OneSwap will be deployed on various public chains

Exchanges from UniSwap to OneSwap are all trying to provide liquidity as much as possible for digital assets, whether by creating prices in a market in short of liquidity or by accomplishing the blockchain mission in a safe and decentralized manner. The success of Oneswap is clear in sight. It is based on the Ethereum ecosystem at present, and will be launched on multiple mainnets such as TRX and EOS for the convenience of various communities and even global users.

OneSwap has already seized the first-mover advantage in 2020. It is gaining momentum to rival UniSwap, and is bound to be the most important part of DeFi. Stay tuned.