- WOOFi operates on the Binance Smart Chain.
- WOOFi gives priority to the quotes on its Synthetic Proactive Market Making liquidity pool, which generates revenue for the network.
Unlike DeFi 1.0, WOOFi Swap eliminates hefty fees and token rewards for liquidity providers by bridging CeFi liquidity and employing hedging techniques to protect them from losses.
What is WOOFi Swap?
Swap is the flagship function of the WOO Network-based decentralized app WOOFi. It operates as a decentralized exchange on an on-chain automated market-making algorithm known as Synthetic Proactive Market Making (SpMM).
Designed for professional market makers, SpMM aims to replicate an order book’s details from centralized exchanges, including price, spread, and depth.
Various tests have been done lately on WOOFi’s SpMM liquidity pool and the results have shown that out of all other DEXs in the market, WOOFi’s SpMM liquidity pool is capable of achieving the highest capital efficiency (volume-to-liquidity ratio) of 300% with the minimal swap fees of 0.025%
Kronos Research is the first-ever market maker for WOOFi. The WOO network is its go-to source for centralized liquidity.
Through a one-click cross-chain swap, users can swap one asset on one chain for another asset on another chain without leaving the UI and going to the bridge.
How does WOOFi Achieve High Capital Efficiency?
As discussed above, through a centralized liquidity source WOOFi simulates the depth of an order book. This allows it to best other AMMs, in the execution of trades the same size as other AMMs, that too with a small fraction of the Total Value Locked.
Moreover, WOOFi, unlike other pools that use separate asset pools for each trading pair, uses one single pool to hold and manage assets like one quote token and multiple base tokens.
Improved Trade Execution through WOOFi
WOOFi is on par with other decentralized exchanges when it comes to high-quality trade execution within different blockchains with just a small portion of the Total Value Locked of Automated Market Makers.
This is comparatively useful for blockchains with thinner liquidity on major assets as compared to Ethereum’s mainnet because here, users are not required to pay outrageous amounts of fees and risk high slippage.
Upon selecting tokens for both ends of the swap and the value of tokens to be swapped from, WOOFi then compares the results of this execution with other decentralized exchanges on the same chain. This includes details like the trading fee, receivable tokens, and the rate of exchange.
WOOFi operates as a decentralized exchange and pays rebates to decentralized apps that bring order flow to the network. It charges a 0.025% swap fee, with 20% of the fee paid to brokers, if any, in stablecoins, for bringing trades to the platform.
Multiple applications, such as decentralized aggregators, web3 apps, wallets, or websites, can integrate with the broker to receive rebates, making WOOFi a highly efficient and user-friendly DEX bridging CeFi liquidity to DeFi.
WOOFi Swap stands out as a decentralized exchange bridging CeFi liquidity to DeFi through its innovative SpMM algorithm. With high capital efficiency and improved trade execution, it offers a seamless experience for users. By rewarding decentralized apps through its broker program, WOOFi ensures a sustainable and efficient ecosystem.