We are proud to announce our recent investment in Vegaswap, a next-generation AMM Protocol that solves impermanent loss with SMART Pools and dynamic fees.
The Pros and Cons of Decentralized Exchanges in the DeFi space
The emergence of decentralized exchanges and AMMs in the DeFi space has undoubtedly provided many opportunities for cryptocurrency traders and investors as they allow direct peer-to-peer transactions to take place online and without the need for an intermediary. Moreover, to this day, such exchanges have created many new possibilities for users that include cheaper transaction fees, lower counterparty risks, financial inclusiveness, and more privacy, where the value they have brought to the industry must be appreciated and not overlooked.
However, like many emerging technologies, DEXs and AMMs have also suffered from several drawbacks that have ultimately affected the levels of confidence that many people have in such systems. These include hacks, manipulations, response time issues, and other inadequacies that have caused standalone users and also the DeFi projects that utilize them to be exploited causing billions to be lost over time.
The most common loss that users experience on such platforms is known as “impermanent loss”, where price volatility resulting from arbitrage or sometimes a hack compromises the price of tokens generated in liquidity pools. When such events occur, they devalue what is seen as “protected funds, allowing individuals to exploit the pools — negatively affecting user morale and confidence. Moreover, such events also no doubt negatively impact the cryptocurrency and blockchain industry’s growth in this sector.
Vegaswap Sets Out To Improve Current AMM Models
It’s no secret that AMM platforms such as Uniswap, Sushi, Balancer, and Curve have a tight grip on the DeFi market at this present moment. But this does not mean that new emerging platforms cannot challenge the status quo, especially if they resolve existing problems and provide users with a safer and more efficient service.
The Vegaswap protocol empowers developers, liquidity providers, pool owners, and traders to participate in a financial marketplace that is open and accessible to all. The marketplace enables traders to swap assets and keeps track of the pools created and available for trading. Moreover, the platform can allow different types of pools to exist that have different features depending on the assets traded within them and the governance of the pool.
Vegaswap aims to create a safer trading environment for users so that the occurrence of a negative exploit can be significantly minimized, and the value of liquidity pools cannot be compromised through arbitrage trading or potential hacks. This is achieved through the implementation of innovative features; including the creation of smart pools that track the prices of their assets diligently alongside enabling the trading of all types of assets such as major tokens, stablecoins, and highly volatile assets, a dynamic pricing mechanism where prices change based on volatility, volume, and transaction acceleration, a multichain approach that will, over time, allow more than three blockchain integrations and 200+ DeFi integrations, and exclusive liquidity mining and treasury protocols that are powered by the platform’s native token — the VEGA token.
Why We Invested?
The trading of DeFi assets on AMM platforms such as Uniswap, SushiSwap, and PancakeSwap has emerged as a new trend in the overall cryptocurrency marketplace in recent times.
These platforms have undoubtedly added much value to the overall industry and have unlocked even more opportunities for individuals to create wealth across the globe. However, they have also been exposed with regards to vulnerabilities, leaving much room for improvement.
Vegaswap has set out to improve the AMM model by providing a more developed solution that matches and enhances the throughput and potential power that such platforms can provide. Through the implementation and creation of its more innovative solutions, Vegaswap will be a project that essentially allows users to access this same AMM model used by existing solutions, albeit more safely, as it concentrates on solving the issues of “impermanent loss” by minimizing the chances of spontaneous devaluation of funds within liquidity pools as a result of arbitrage trading and other potential exploits such as hacks. It is also the first platform of this kind that is exploring the use of multichain technologies to utilize the benefits of each available chain to improve the entire cross-chain ecosystem.
Vegaswap is joining the Master Ventures ecosystem as one of our FUEL incubation projects. With this, the platform will benefit from our decades of combined experience in overseeing, nurturing, and accelerating the development and growth of potentially disruptive new technologies. By leveraging the full breadth of our resources, including advisory, marketing, networking, community building, and tried-and-tested growth strategies, we aim to help Vegaswap deliver on its immense potential and find its fit within the industry.
“We are incredibly excited to be incubated by such an accomplished player with a wealth of experience in working with disruptive technologies. With Master Ventures’ support, we have the confidence needed to redouble our development efforts to deliver a great product to an industry that is brimming with potential.” — Benjamin Cordes, Vegaswap CEO and Founder.
Vegaswap is a user-centered automatic market maker that leverages multichain technology, providing users with a wide range of DeFi and cross-chain applications through its platform. It supports and enables seamless token earnings through customizable liquidity pools, dynamic pricing, and an intuitive UI. Vegaswap makes the work of LP providers more efficient and profitable by creating provisions for unique smart pools, providing analytics tools, and reducing impermanent loss with adaptive spread.
About Master Ventures
Master Ventures is a blockchain-focused venture studio helping to build the next generation of blockchain-based Web 3.0 system innovations within the crypto industry. Launched in 2018 by Founder and CEO Kyle Chassé, the company’s ethos can best be summarized in the acronym #BeBOLD: Benevolent, Open, Love, Decentralized.
Master Ventures co-creates with entrepreneurs and businesses worldwide to turn the best ideas into innovative and disruptive products. They do this by investing as strategic partners through offering advisory services to the projects they believe in. To date, Master Ventures has invested in over 40 crypto projects, including the likes of Kraken, Coinbase, Bitfinex, Reef, DAO Maker, Mantra DAO, Thorchain, and Elrond.
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