The decentralized finance (DeFi) noted a massive growth in recent months, as investors flocked to the industry for high yields. In an effort to support the industry still, Switcheo enabled a DeFi support for the Zilliqa blockchain. Following an announcement today, Switcheo launched a decentralized exchange on Zilliqa dubbed Zilswap.
Ultimately, this marks the first decentralized exchange or DEX on the blockchain platform. Additionally, the entire Zilliqa community can participate in the booming DeFi market on the blockchain.
Zilswap Launches on Zilliqa
The launching of Zilliqa follows the existing partnership between the two parties since March this year. Zilswap intends to run as a fully on-chain decentralized exchange. The blockchain platform also noted that Zilswap is part of their core push into the decentralized finance (DeFi) market.
For the first time, the Zilliqa users can now trade digital currencies in the DeFi market through the DEX. “Built from the ground up by Switcheo developers, Zilswap uses a constant product automated market maker on top of a permissionless liquidity protocol, similar to Uniswap.” This means users can add liquidity to pools to earn by locking their coins to earn passively.
Zilliqa Enters DeFi With Native DEX
At the moment, the decentralized exchange supports a ZIL-XSGD as the first token pool. ZIL is the native cryptocurrency of the Singapore-based blockchain platform, while XSGD is a stablecoin backed by the Singaporean dollar. By contributing these tokens to the pool on Zilswap, the liquidity providers earn from the fees of each trade.
Similar to Uniswap, Switcheo noted plans to launch a governance token for the decentralized exchange. The supposed ZRC-2 token plays a significant role in protocol governance. Per the report, the DEX developer intends to issue the token to the liquidity providers and the users on Zilswap.
In the meantime, the parties manage the decentralized exchange. However, a decentralized autonomous community will take over the project as it matures. Besides the development today, Switcheo plans to integrate its TradeHub to the Zilliqa blockchain.
Meanwhile, the launch of the Zilliqa-based DEX comes as trading activity on Uniswap keeps rising. Uniswap is the largest DeFi protocol and DEX with the highest value of assets locked. Per DeFi Pulse, more than $2 billion sits in the protocol.