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Getting started with DMC, CrowdSwap Bridge, Vanilla V3
Patrick Hammel
January 22, 2024
In todays edition InTheMarket:
Getting started with MetaChain - A guide
New Bridge for DeFiMetaChain
VanillaSwap V3 is live
Read time: 4 minutes
Hey,
Welcome to a new edition of the InTheMarket newsletter! There are exciting news and developments in the world of DeFiChain. Let's get started right away!
Getting started with MetaChain - A guide
To get started in the world of DeFiMetaChain (DMC), there are a few basic steps that will help you get technically ready and discover the many possibilities of DMC.
1. Technical Introduction
Add network and tokens: The first step is to add the MetaChain network and the associated tokens to your wallet. You can find detailed instructions here in the Medium article.
Send funds to the MetaChain: Once your wallet is set up, you can transfer tokens to the MetaChain to use different projects and protocols (this process is also explained in the medium article).
2. Discover Projects on DMC Universe
Information source: Visit DMC Universe to get an overview of the various projects on the MetaChain. There you will find information about each project, including their goals, teams and social media channels.
Projects in detail: Explore the individual projects to understand how they work and what opportunities they offer.
3. Interact with different protocols
Active participation: After you have informed yourself about the different projects, you can start to actively interact with them. Be it by trading on a DEX, participating in a staking program or using other services on MetaChain.
Gain experience: By interacting with different protocols, you will gain hands-on experience and better understand how the MetaChain and its projects work.
Summary
Getting started with MetaChain initially requires some technical understanding to set up your wallet and add networks and tokens.After that, you can explore the exciting world of DMC projects on DMC Universe and interact directly with different protocols.This process gives you the opportunity to dive deep into the DeFiMetaChain and utilize its diverse offerings.
New Bridge for DeFiMetaChain
The CrowdSwap Bridge was developed to facilitate the transfer of assets between different blockchains, such as Ethereum and DMC.
The Bridging-Process: A detailed Walkthrough
A user on Ethereum wants to transfer assets to DMC. He initiates a transaction for the BridgeContract on Ethereum.
In this transaction, the user's Ethereum (ETH) is exchanged for a special token called a "crowd token". This is a crucial step in the bridging process. Once the exchange is complete, the crowd token is burned on Ethereum, meaning it is effectively removed from circulation on the blockchain.
At the same time, the same amount of crowd tokens is generated on the DeFiMetaChain. This ensures that the total supply of crowd tokens on both blockchains remains constant.
The generated crowd token on DMC is then automatically exchanged for the corresponding amount of ETH on DMC, completing the bridging process.
An example to illustrate this
Let's say Alice wants to transfer 10 ETH from Ethereum to DMC. This is done as follows:
Alice sends her 10 ETH to the BridgeContract on Ethereum.
The 10 ETH are exchanged for a corresponding amount of Crowd Token.
This Crowd Token is then burned to Ethereum.
An equivalent amount of Crowd Token is minted on DMC.
These crowd tokens are automatically exchanged for 10 ETH on DMC, ensuring that Alice has the same amount of ETH on the DeFiMetaChain.
Node validators and their distribution
A total of 11 nodes validate all bridge swaps. This means that they ensure that everything is done properly. The initial distribution of these nodes is as follows:
3 nodes for CrowdSwap
Minimum 1 node for the Community Fund (likely 2-3)
Additional nodes will be distributed to other projects within the DeFiChain ecosystem, with the final distribution still under discussion.
A unique aspect of this solution is that node validators will receive fees for transactions between other chains, not just those in which DMC is involved. This means that the community fund as a node validator generates income from all transactions that take place over the bridge.
Financing and development of the bridge
The development of this decentralized cross-chain solution is supported by CrowdSwap and covers the following costs:
Development Node Validator Client + Explorer V1.0: $150,000
Quality Assurance: $30,000
Testing & Support: $30,000 - $40,000
Any-2-Any + MM DeFi Cross-Chain Solution: $250,000 (already developed)
The CFP will require $85,000, with the remainder of the cost covered by CrowdSwap. Based on the current DFI price, a total of 736,666 DFI will be requested, including a 30% buffer for price fluctuations. Any excess funds will be returned to the Community Fund. The full amount of $85,000 will be returned to the Community Fund through the fees collected from the Nodes.
Where does the liquidity come from?
An essential part of a bridge is its liquidity to make swaps work. Initially, CrowdSwap is providing $250,000 in crowd tokens as starting liquidity. Further ideas are currently being discussed.
Two Simple Approaches to Liquidity:
CROWD/DFI Pool
Think of this as a big pot where CrowdSwap puts in $250k worth of CROWD tokens. This pot can be mixed with another cryptocurrency, like DFI. The DFI can come from users who want to earn some fees by contributing to this pot, or it could come from the Community Fund. This way, the pot always has enough CROWD and DFI for users to trade.
Single Asset Pools:
Instead of mixing two types of crypto in one pot, this method has separate pots for each type of crypto. Each pot starts with a smaller amount, like $30–40k, to keep things safe and manageable. Users can still trade efficiently, and if more crypto is needed in a pot, more can be added.
Additional Efforts for Enhanced Liquidity
The bridge also plans to use a special system that matches people who want to swap their crypto, making the process even smoother. Discussions are ongoing to bring in professional market makers who might add more crypto to these pots, ensuring there’s always enough for everyone to trade.
Note: this approach works without liquidity!
Outlook
The CrowdSwap Bridge will significantly improve the functionality and accessibility of DeFiMetaChain with its innovative approach to transferring assets.
For more information on this CFP, please visit the Reddit link. Voting is currently underway to decide whether the whole thing should be implemented for the DeFiChain. Here you can see an overview. There is also an interview with the founders of Crowd Swap.
VanillaSwap V3 is live
VanillaSwap has just released its latest version, V3. Here is an overview of the most important new features and what they mean for you:
Concentrated liquidity
What is this? This function allows you as a liquidity provider to determine exactly in which price ranges you want to deploy your capital.
The advantage for you: This allows you to act more flexibly and better adapt your investments to your trading strategy.
Several fee levels
What does that mean? There are different fee levels depending on how much risk you are prepared to take. This means that you are better rewarded for higher risk.
Benefits for you: You can now weigh up how much risk you want to take and choose higher or lower fees accordingly.
More about VanillaSwap V3
Continuation of V2: Version 2 of VanillaSwap remains active. So you can choose which version you want to use.
Migrate your liquidity: If you are already invested in VanillaSwap V2, you now have the option of transferring your funds to the new version.
Universal router coming soon: This future feature will simplify the use of VanillaSwap even further.
What this means for you
The introduction of VanillaSwap V3 offers you as a user extended and more flexible trading options. You can better manage your investments and adapt them to your strategy. Visit VanillaSwap V3 to discover the new features for yourself and enhance your trading experience.
🎧 Dive Deeper with InTheMarket Podcast and YouTube Channel
Want to explore more about DeFiMetachain? Check out our podcast episodes on Spotify and Apple Podcasts, and don't miss our YouTube video where we discuss DMC in detail:
💬Share Your Feedback with Us
That's all for now! Thank you for being with us on this exciting journey. Don't forget to share our DeFiChain newsletter with your friends and colleagues. Let's grow this community together!
We understand that blockchain and DeFi might not be the only topics that you're interested in. In a world increasingly dominated by technology, AI and machine learning are two more key areas that are becoming ever more relevant.
If you're interested in learning more about AI, particularly on how you can effectively utilize it in your studies or content creation, you might find this e-book helpful:
Best regards, Peddy
*All of this ist just information and no financial advice!