- KLAYswap is a decentralized crypto exchange based on the Klaytn network, aimed at enhancing DeFi services through its liquidity protocols.
- KSP is the native token of the Klayswap platform, primarily used for participating in liquidity pools.
KlaySwap is built on the Klaytn decentralized exchange network and is designed to facilitate the exchange of Klaytn-based tokens. It offers liquidity for assets and enhances their growth while providing users with greater control over their assets and reducing cyber threats like hacking.
What is the KLAYswap Protocol?
KLAYswap is a blockchain-based quick exchange protocol that utilizes liquidity pools provided by an Automated Market Maker (AMM). This service allows users holding KLAY tokens to become liquidity providers and earn profits through transaction-based commissions.
The protocol enables the transfer of Ethereum-based tokens to the Klaytn platform via a transparent IBC bridge known as the Orbit bridge, allowing assets to be farmed that were previously disconnected from decentralized networks to. KLAYswap facilitates direct trading of Klaytn-based tokens without the need for centralized exchanges as intermediaries. The platform is governed by a DAO called Klaytn Swap DAO, which makes decisions related to platform development and governance tokens.
What is the KLAYswap Token?
KLAYswap’s protocol token (KSP) is a governance token that empowers holders to determine governance motives, including rules and regulations related to the platform’s development. Token holders play a direct role in decisions concerning contracts, distribution, mining, and fees.
KSP also enables the creation of new liquidity pools. When a new KCT token pool is created on the KLAYswap network, a specific fund for pool contract creation is charged to KSP. Liquidity mining allows users to acquire KSP tokens. In each genesis block, KSP is distributed through liquidity mining and further distributed among KLAYswap liquidity providers as compensation for their liquidity in the pool.
How does the KLAYswap Protocol work?
To provide liquidity to the ecosystem, KlaySwap utilizes an Automated Market Maker mechanism based on the formula x * y = k, where x represents Klay, y represents KCT tokens, and k is a constant. As the liquidity supply of KLAY increases, the supply of KCT decreases to maintain the constant ratio. Any user holding KLAY or KCT tokens can become a liquidity provider.
When a liquidity pool is created, the price range is set based on the quantity of each token. Each token’s supply in the liquidity pool varies in proportion to its price. Traders can directly trade Klaytn-based tokens on the exchange using the AMM mechanism. A small share of each trade is distributed among liquidity providers as a share of their pool.
Fee Charged on KLAYswap
KLAYswap applies fees to different types of transactions. The fees charged by the KLAYswap protocol include:
1. Trading Fee: KLAYswap charges a 0.3% trading fee for trades conducted on the platform. This fee is distributed between KLAYswap and Liquidity Providers.
2. Token Listing Fee: Token issuers who wish to list their tokens on the exchange are charged a token listing fee.
3. Withdrawal Fee: When a user withdraws tokens from liquidity pools, KLAYswap charges a 0.25% withdrawal fee.
Additionally, as KLAYswap is built on the Klaytn blockchain, users are required to pay Gas Fees for their transactions on the network. These fees are paid in KLAY and may fluctuate based on network overcrowding and complexity.
KLAYswap offers opportunities to both novice and experienced users. Its decentralized structure ensures reliability, scalability, and sustainability. Users can benefit from various actions, such as participating in liquidity pools or becoming providers, and enjoy different trading options. With a user-friendly interface and low fees, KLAYswap provides a seamless and accessible experience.