With the emergence and common use of Decentralized exchanges, there was a feeling of need for tools to consolidate and establish communication between these exchanges. Users need a tool to use these exchanges The best price And Lowest fee find between different dex. With the passage of time and the general use of dexes, platforms were built that provide access to the best decentralized exchanges in one platform.
Para swap is one of these tools. This platform allows users to access multiple exchanges. Now, in this article, we introduce this platform and examine the PSP token.
What is the ParaSwap platform?
The ParaSwap platform is one Decentralized exchange (DEX) that optimizes transactions for users through better prices and lower fees. ParaSwap sources its liquidity from major DEXs such as Uniswap, Balancer, Curve and Kyber.
In fact, the Paraswap platform is a DEX Aggregator, similar to 1inch or 0x Matcha. In short, this decentralized exchange uses a search engine to find the best trading rates across multiple DEXs, providing users with the lowest transaction fees and best possible fees.
To learn more about dex and its difference from centralized exchanges, you can read the article What is dex.
It’s important to understand that dex aggregators like ParaSwap don’t necessarily have any liquidity pools. Instead, these platforms use the liquidity of other AMMs (Automated Market Makers) and receive a small fee in return.
However, this dex is currently free of charge. In addition, only 50% of the slippages (Slippage occurs when a transaction is executed at a price different from the expected price or the asking price) is collected by the Paraswap platform, while the other half is distributed to users. This is one of the best advantages of this protocol for users.
How does the Paraswap platform work?
Just like other dex aggregators in the DeFi space, ParaSwap works pretty much the same.
- Step one: The user determines the amount of token he wants to trade.
- Step two: The Paraswap platform finds the best trading rates among all supported DEXs.
- Step three: Then ParaSwap provides detailed information and all trading routes to the user.
- Step four: The user selects the most suitable price and DEX and starts the transaction.
- The fifth step: Then the exchange is done and the purchased token is sent to the user.
Usually, aggregators try to offer the best price to users. In order to achieve the best prices, this Dex implements various methods such as:
- Order execution optimization: The Paraswap platform may split a user’s transaction into multiple orders on multiple DEXs. For example, if you want to convert five hundred ETH to DAI, your transaction will be split into four parts: 50% ParaSwap Pool, 22% Kyber, 15% SushiSwap, and 10% UniSwap.
- Additional transaction: Sometimes direct transaction is not the best option. For example, if the user wants to convert sUSD to ETH, the best way is to buy USDT and then buy ETH with USDT. By using this method, which is done automatically, the exchange is done with the lowest amount of fees.
- Fee optimizations: The protocol takes the cost of fees into account when finding a transaction path and helps keep fees down by implementing several solutions, such as the implementation of the GST2 gas token.
- Simple authorized transactions: By validating a token on the Paraswap platform, you can exchange it on any DEX supported by the protocol. You do not need to go through this process several times.
Advantages and disadvantages of para swap
By splitting orders between different DEXs, the platform ParaSwap Can Competitive rates provide for each swap. The user simply selects the two digital currencies he wants to trade and ParaSwap does the rest. In short, this protocol optimizes the transaction for users by providing the best price. It also warns and informs the user if the transaction desired by the user is at risk of a sudden price change.
The gas cost recommended by the ParaSwap platform is optimally calculated at the time of the transaction. However, in the end, the user has full control and authority in choosing the gas cost. This user choice may seem convenient, but the low gas cost has consequences. If the gas cost selected by the user is too low, the miners will never select the transaction for confirmation.
One of the disadvantages of using decentralized exchanges is that they do not allow users to directly purchase digital currencies. In addition, the ParaSwap platform only allows the exchange of cryptocurrencies, and the user cannot make purchases with fiat currencies such as euros or dollars.
Introducing the PSP token and its uses
The PSP token is a native ParaSwap cryptocurrency launched on the Ethereum blockchain platform. The Paraswap platform token has two important uses: The role of governance through which users can express their opinion in important decisions of the network and Sticking that users will be able to earn profit from the platform by investing.
This token will eventually be multiplied by two billion, of which 409 million are currently in circulation.
The distribution of tokens is as follows:
- 51% for ParaSwap ecosystem
- 17.6 percent for the main project team
- 14% for seed investors
- 10% for future programs and updates
- Five percent for future team members
- 2.4 percent for advisers and secondary investors
In the airdrop, which was very controversial, 7.5% of the tokens allocated to the ecosystem were distributed among users.
The future of the ParaSwap platform and the PSP token
DeFi users will certainly appreciate what this protocol has to offer. With the ParaSwap platform, users can save gas costs by consolidating their transactions into one transaction. Although Ethereum is the main platform for transactions in this protocol, the exchange also supports other digital currencies and allows transfers with several DeFi protocols.
Recently para swapped Dedicated NFT market It has launched itself and according to the information of the project roadmap, it also intends to connect with other blockchains. Therefore, in the future, it will become Dexi Multichain, which will attract more users. This expansion of the ecosystem will affect the growth of ParaSwap and PSP token.
What is Para Swap? Introducing the Paraswap platform and Paraswap token for the first time on Wallex blog. appeared.
