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The main UI
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Inspiration
Decentralized exchanges (DEXes) provide services that are almost identical to those available from traditional centralized exchange (CEXes), but at substantially higher prices. This price discrepancy is clearly reflected in usage statistics. Today, DEXes mediate less than one percent of daily crypto trading volume. To work towards changing this, we decided to focus on a single segment of the exchange sector, stablecoin swaps, where DEXes have the largest potential cost advantage. Our product, Squink, will enable users to swap between different stablecoins at less than half of the cost of any existing service.
What it does
Squink is an automated market maker that enables extremely low cost swaps between USD stablecoins, e.g. DAI, USDC, and Terra. Fees for utilizing Squink are in the range of 0.05 percent of exchanged volume or $0.50 USD for a $1000 exchange. This is less than half the cost of Binance, the cheapest existing provider.
Much like Uniswap, Squink is a lightweight plug n’play module that is easy to integrate into other financial and non-financial products. By integrating Squink, decentralized exchange aggregators can take advantage of small differentials between prices quoted in DAI, USDC, Terra, etc. to save their users substantial amounts of money. Likewise, the exchanges themselves can utilize Squink to aggregate their stablecoin trading pairs into a single integrated order book that offers better prices and deeper liquidity. Finally, e-commerce sites can uitilize Squink to accept any stablecoin, while still receiving payment in their preferred currency.
How we built it
Under the hood, Squink uses a generalization of the Uniswap constant product formula that allows for multiple assets and a user-specified level of price volatility. In very low volatility markets such as stablecoins, this optimization allows Squink to support an extremely high level of liquidity using a very small pool of capital.
We created our own Tendermint-based chain using Lotion to implement the automated market maker and to host various faux stablecoins.
Accomplishments that we're proud of
Squink has the potential to undercut all existing services by 2-fold or more (10-fold if we consider Coinbase). We’re very proud of such a clearcut value proposition.
What's next for Squink
We would like to configure Squink to hold the bulk of its stablecoin assets in a reserve composed of interest-bearing form, such as cDAI or cUSDC. This would enable Squink to offer some combination of better returns for liquidity providers and even lower prices.
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