Thread by @WinterSoldierxz

1/ In less than 3 mos., @WombatExchange firmly sits at #3 in the list of DEXes on #BNBChain, with an ATH TVL of US$220m.

A $10m swap only incurs $4.7k slippage vs $2.5m on #Pancakeswap.

How is this possible?

🧵A thread on how Wombat is re-engineering the stableswap experience

2/ What is @WombatExchange?

Wombat is a low slippage, hyper efficient stableswap built on #BNBChain. Its TVL currently sits at US$178m, comprised of stablecoins and $BNB liquid staking derivatives.

3/ What’s special about @WombatExchange?

Two words: Coverage Ratio.

4/ Wombat uses the #TradFi concept of Coverage Ratios to structure its liquidity. Each #stablecoin is a business unit with its own assets and liabilities.

5/ When a user deposits tokens, both assets and liabilities increase. Wombat has tokens to enable swaps, but those tokens must also be paid back to the depositor with interest.

6/ When a swap is conducted, the assets of two liquidity pools increase / decrease based on the direction of the swap.

7/ This fundamental change in @WombatExchange’s liquidity pool design creates 3 unique advantages:

(i) Single sided LP
(ii) High capital utilization, low slippage, no more silos
(iii) Unlimited scalability

8/ Single Sided LP

Instead of the typical liquidity pairs (e.g. $USDC <> $USDT), users only need to deposit one type of token to yield farm on @WombatExchange.

Single sided LP tokens are also more ideal for lending protocols and other derivative tokens.

9/ High Capital Utilization

A common inefficiency of current DEXes are liquidity silos. Liquidity is pool specific.

$USDC <> $USDT and $USDC <> $DAI pool both hold $USDC, but $USDC used for swapping with $USDT must come from the $USDC <> $USDT pool

10/ Wombat breaks down these silos and uses more of its liquidity more efficiently.

The most tangible benefit of this high capital utilization is the ultra low slippage offered by @WombatExchange.

Here’s Wombat vs Ellipsis FYR ⬇️

11/ Unlimited Scalability

With @WombatExchange’s liquidity structure, new #stablecoins are not constrained by their lower liquidity levels vs $USDT or $USDC.

On the flipside, liquidity for predominant stablecoins can scale endlessly and support larger transactions.

12/ @WombatExchange offers a superior product for token swaps. And it’s easy to see why it garnered investments from some of the top VCs in crypto:

Series A was led by @animocabrands and @HailstoneVC. Additional investors included @BinanceLabs, @TPSCapital, & @GSR_io etc.

13/ A subsequent Strategic Round saw the likes of @shimacapital, @jump_, and @wormholecrypto contribute to the growth and development of @WombatExchange

14/ In the next thread, I will go in-depth into @WombatExchange’s product mechanisms and the #WOMWars phenomena.

15/ If you like my work, please like and RT the first tweet linked below:

https://twitter.com/WinterSoldierxz/status/1582749813656866816?s=20&t=DR9r5xP4i9pTNI20m-yH8w

16/ I regularly write in-depth protocol analyses and publish detailed research reports for FREE.

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