StarryNift Launched StarrySwap
StarryNift has recently launched its StarrySwap product and is continuously enhancing the Metaverse citizenship ecosystem through more functions and empowerment integrating multi-chains.
Introduction of StarrySwap
Due to the explosive growth of DeFi, multiple assets were introduced into Web3 world as anchor coins, such as USDC and USDV. In the current market, there are over 20 asset-backed tokens, with several of them backed by the same underlying assets. In the future, we anticipate the introduction of more tokens that effectively represent the same underlying assets. In theory, the swap ratio between these tokens should be 1:1 since they share the same backing. However, existing DEXs in the market did not fully consider this fundamental aspect when designing their exchange protocols, resulting in high costs for users due to slippage. Therefore, there is an urgent need for a better-designed product that specializes in stablecoin swaps.
StarrySwap is a novel single pool liquidity protocol specialized in same backed assets with low-cost zero-slippage swapping and aims to solve the issues of existing protocols. Our unique design and algorithm allow the swap ratio of the same backed asset to be fixed at 1:1 most of the time, and meanwhile make the gas fee 80% lower than existing projects.
Simple and Efficient Swap
StarrySwap implements a simple and efficient swap that supports a list of assets in the pool. For each token in the pool, it has two swap parameters
1)Soft weight — the highest percentage of the token until it becomes unbalanced (imposing penalty);
2)Hard weight — the percentage of a token should never exceed, which should be equal to or greater than soft weight.
For any swap that results in percentage changes of the tokens in the pool, as long as the percentages fall into the range of soft weights of the swapped tokens, then 1:1 ratio swap is guaranteed. Otherwise, a penalty will be imposed for the swap.
Example A (Swap without Penalty): Suppose the pool has 120M USDC / 80M USDT and the soft weights of USDC and USDT are 60%, 60% respectively. A user can swap 10M USDT for 10M USDC as the resulting percentages of USDC/USDT are [55%, 45%], which fall into the soft weight range.
Example B (Swap with Penalty): Suppose the pool has 120M USDC / 80M USDT and the soft weights of USDC and USDT are 60%, 60% respectively. A user wants to swap 10M USDC for USDT. However, since the resulting percentage of USDC > 60%, the user will get < 10M USDT.
Note that the penalty fee will be evenly distributed to LPs, in order to compensate them for the risk of holding the excess asset in the (post-swap) pool.
Penalty Calculation
The penalty is using a bonding curve, where the penalty increases (and thus the price of returned token increases) as the percentage of a token increases.
Zero-slippage Swapping Algorithm
Current decentralized exchanges (DEXs), including Uniswap, face the issue of high pricing slippage due to market fluctuations and network limitations. This means that when selling, the final price is lower than the marked price, and when buying, it is higher. While slippage is generally acceptable for most blockchain projects, excessive slippage for the same backed assets can result in unnecessary losses. Curve.fi and mStable have proposed solutions to reduce slippage through their swap formulas. However, Curve.fi cannot guarantee a 1:1 ratio swap, even though its slippage rate is lower than Uniswap. On the other hand, mStable can ensure a 1:1 ratio swap within a predefined range, but it restricts swaps once a predefined weight is reached. In summary, neither Curve.fi nor mStable has completely solved the slippage issue. We have developed a solution that addresses both concerns. Starryswap introduces a new algorithm that can mostly guarantee a 1:1 ratio swap if the soft weights are met. In cases where the weights are not met, a transaction is still allowed but with a penalty imposed in extreme scenarios.
Citizenship and StarrySwap
Citizenship allows users to customize achievement standards and showcase their Web3 identities through dimensions including General, DeFi, SocialFi, GameFi & Metaverse, NFT, and DAO. Citizenship serves as credentials to mint SBTs, accumulate XP, upgrade card levels, and even win rewards by ranking high on the leaderboard. Active citizens who contribute constructively and consistently to the Starryverse may also receive token allocations and airdrops as a form of recognition.
In addition, Citizenship will also support multi-chain & multi-account systems, protect user privacy through ZKP, and allow users to control all data, achieving a “DID identity” that is accessible, editable, profitable, and visualizable. Through the decentralized identity protocol of StarryNift Citizenship, people can establish a trusted, universal digital identity system in the Metaverse, promoting the mutual integration of the Web3 ecosystem.
Starryverse Citizens can utilize StarrySwap as a tool for Defi, SocialFi and Gamifi purposes. Their citizenship DID can be enriched through various dimensions and benchmarks after more interactions with StarrySwap. As a result, their credentials will be upgraded for more usage and rewards in the future.
About StarryNift
