Decentralized exchange bridging CeFi liquidity to DeFi.
WOOFi Swap Introduction
WOOFi Swap is a decentralized exchange bridging CeFi liquidity to DeFi. It deploys its liquidity network and institutional market-making techniques to provide best possible pricing and reduced slippage on Binance Smart Chain. For WOOFi Swap, we developed a brand new on-chain market-making algorithm called Synthetic Proactive Market Making (sPMM). The algorithm is designed for professional market makers to provide on-chain liquidity in a way that better simulates the price, spread, and depth of an order book on centralized exchanges. Decentralized exchanges from the era of DeFi 1.0 were forced to pay liquidity providers (LPs) a lot in fees and inflationary token rewards to incentivize and rent liquidity. As part of DeFi 2.0, WOOFi Swap eliminates these inefficiencies through bridging CeFi liquidity and hedging strategies to avoid impermanent loss for LPs. This framework equates to lower fees, with 0.1% on WOOFi Swap, compared with Uniswap V2 and similar AMM-style DEXes that typically have a standard fee of 0.3%. Users can compare the prices available on other platforms in real-time directly through the interface, which clearly displays WOOFi Swap’s execution quality. Another principle of the DeFi 2.0 era is the rise of multi-chain solutions. As WOOFi Swap will be implemented on multiple networks, users will be able to get the same trade execution across many networks without worrying about the slippage due to imbalanced liquidity concentrations on side chains and Layer-2 networks. The ultimate vision for WOOFi Swap is that users can expect the same high level of trade execution, regardless of which chain they are using, and liquidity providers do not have to be concerned with impermanent loss. For traditional AMM DEXes, the cost of incentivizing deep liquidity on multiple networks is too high to be sustainable. WOOFi Swap features a new innovation called synthetic proactive market-making, or sPMM. sPMM is an algorithm that simulates a CeFi order book by connecting to a custom on-chain market data feed. This feed pushes market data from the WOO Network order book in frequent intervals directly to the blockchain. According to recent tests, the sPMM can achieve higher capital efficiency (i.e. volume-to-liquidity ratio) than all other DEXes on the BSC market, which enables WOOFi to charge lower swap fees of only 0.1% across all pairs.