How cross-chain liquidity aggregation can shape the future of DeFi

What will ease the burden of DeFi users and remove some of the barriers to entry for newer market participants? This project sees the future of DeFi as multichain co-existence.

As decentralized exchanges now represent a significant amount of crypto trading volume, it is vivid that these platforms will play a big role in the smart economy of the future.

Automated market makers, in particular, changed the game by eliminating the need for order books entirely and replacing them with liquidity pools. This model was a win-win for both traders executing swaps and liquidity providers incentivized to supply their tokens and earn fees from traders.

Even the sporadic liquidity issues on DEXes, brought about by a sometimes fragmented marketplace, were addressed by the emergence of DEX aggregators – platforms that would essentially pool together fragmented liquidity onto a single platform.

For the most part, however, these DEX aggregators are limited to connecting liquidity pools on Ethereum. This obviously limits the level of multi-chain accessibility actually possible while trading on a DEX. Moreover, as things stand, trading volume on DEXes still pales in comparison to most centralized exchanges.

And while Ethereum might be the most prominent network in the industry, it isn’t for everybody. It is no secret that network congestion and the lack of scalability have caused high transaction fees on Ethereum.

Traders have looked to Layer 2 solutions and sidechains such as Binance Smart Chain, HECO, and Polygon as alternatives, but the transaction barriers between them still limit their choices considerably.

In some instances, the convoluted nature of actually performing a trade coupled with these liquidity issues has driven DeFi traders right back to centralized exchanges.

Clearly, interoperability between blockchains is the need of the hour. Cross-chain liquidity aggregators address these issues prevailing on decentralized exchanges by aggregating liquidity sources from various DEXs across chains and their own cross-chain pools.

O3 Swap is one such cross-chain DEX aggregator that works on expanding available token markets and increasing liquidity and trading volumes, easing cross-chain transactions for users all around.

O3 Swap describes itself as the first cross-chain aggregation protocol that enables free trading of native assets between heterogeneous chains by deploying ‘aggregator + asset cross-chain pool’ on different public chains and Layer 2 granting users access to cross-chain transactions with one click.

The project sees the future of DeFi as multichain co-existence. For the moment, it supports Ethereum, BSC, HECO, Polygon, and NEO cross-chain transactions and four cross-chain pools: USD Pool (ERC20-BEP20-HRC20), ETH pool (ERC20-BEP20-HRC20), BTC Pool (ERC20-BEP20-HRC20), and USDC Pool (ERC20-BEP20-Polygon).

With the use of special algorithms, cross-chain DEX aggregators identify the most optimal routes to fulfill trade orders across blockchain ecosystems. This important functionality will not only ease the burden of existing DeFi users but also remove some of the barriers to entry for newer market participants.

Learn more about O3 Swap

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Flamingo (FLM) TVL rises as Ethereum gas solutions remain elusive

Flamingo’s total value locked continues to rise as DeFi investors are attracted to the platform’s zero-fee transactions and high-yield liquidity pools.

Yield farming has grown in popularity over the past year alongside the rise of decentralized finance, but recently the ability to earn a good return has been limited by the high transaction costs on the Ethereum (ETH) network. 

As a result, yield farmers have begun exploring options outside the Ethereum network for more accessible opportunities in a low fee environment.

One option that has shown steady growth in liquidity since launching is Flamingo Finance (FLM), a DeFi platform based on the Neo (NEO) blockchain and the Poly Network interoperability protocol.

Flamingo finance total liquidity and 24-hour volume. Source: Flamingo Finance

Flamingo aims to become a full-service DeFi platform and the protocol currently has a cross-blockchain asset gateway (wrapper), an on-blockchain liquidity pool (swap), a blockchain asset vault, a perpetual contract trading platform (perp) and a decentralized governance organization (DAO).

The cross-blockchain asset gateway is currently capable of wrapping ERC-20 tokens including Wrapped Ether (WETH) and Wrapped Bitcoin (WBTC), as well as Ontology-based (ONT) tokens.

Interaction with the protocol is done using the NeoLine or O3 wallet browser extensions for Neo tokens, the Cyano wallet browser extension for Ontology-based assets, and the MetaMask browser extension for transactions requiring the Ethereum network.

While the platform is not really a contender with Etheruem, the low fees have been attracting users, as shown by the rising TVL. Once all collateral has been wrapped and deposited on the Neo blockchain, all transactions on the Flamingo protocol have a fixed cost of 0.011 GAS and there is a option to choose a feeless transaction if the user is willing to wait a little longer for the transaction to process.

Competitive yields boost liquidity

When Flamingo originally launched, it offered simple staking and high yields to attract the initial pool of liquidity that helped get the ecosystem established. It has since shifted into offering yield opportunities for liquidity pool providers, especially on pools where there is a greater need for liquidity.

Liquidity pool staking rates on Flamingo Finance. Source: Flamingo Finance

As seen in the graphic above, all of the pools are paired with Neo and rewards are paid out in FLM token.  

According to Flamingo’s Twitter feed, the protocol is now gearing up for the release of Neo 3.0, which began its Testnet launch on March 25. Once fully implemented, Neo 3.0 could see increased activity on the network and spark a rise in value for FLM as it’s the base pair for all of the liquidity pools.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Unifi Farms beta launches on Unifi Protocol to pioneer no-stake farming

Unifi Farms beta launches on Unifi Protocol to pioneer no-stake farming

Singapore, Singapore, 26th February, 2021, // ChainWire // Unifi Protocol announces the launch of Unifi Farms. The most revolutionary part of Unifi Farms is there is no staking of the liquidity token required. The public beta launch of Unifi Farms V1 will take place on not one, not two, but six different blockchains at once. […]

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Shifting into ‘Lite’speed: DeFiChain Launches Litecoin Liquidity Mining

Shifting into ‘Lite’speed: DeFiChain Launches Litecoin Liquidity Mining

DeFiChain and Litecoin Foundation strike agreement to offer Liquidity Mining for the popular cryptocurrency on the DeFiChain platform. DeFiChain users can earn up to two DFI per LTC block mined using the DeFiChain desktop application. 11th February 2021, Singapore: DeFiChain, the world’s leading blockchain on the Bitcoin network devoted to decentralized monetary applications, has today […]

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SushiSwap Records 171% TVL Growth to Over $3 Billion in a Month

SushiSwap Records 171% TVL Growth to Over $3 Billion in a Month

SushiSwap has gained 9.29% in the last 24 hours to become one of the best performing decentralized exchange platforms of the day with over $3 billion in total value locked (TVL), compared to $1.2 billion at the start of the year. A new report by DeFi metrics site DappRadar shows that a 93% increase in user activity […]

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