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What is TwinSwap
TwinSwap is a type of decentralised AMM (Automated Market Maker). Users can swap/trade tokens directly with the smart contract without having to trade with another buyer/seller
Similar to other AMMs like PancakeSwap or ApeSwap, users can add liquidity to the contract and profit from fees, at the same time, any user can use the swap and use this deposited liquidity to trade against.

Diferences

Prices

The price of tokens in AMMs like PancakeSwap is set by the internal supply and demand of those assets. The price of tokens in this types of AMMs is not linked to the price on other exchanges and each AMM could have a slightly different price.
Twin Swap uses Oracles for pricing the tokens, that means that the price is not determined by how much demand and supply there is inside the exchange, and it relays on the oracles to relay the price from other exchanges.

Slippage

Using oracle prices means that the exchange doesn't need to discover the token price on it's own by using a pricing curve. Twin Swap has 0% slippage with any trade volume up to it's maximum liquidity, this means all liquidity in TwinSwap is used at it's full potential and allows for more trade volume with lower liquidity locked

Liquidity

Twin Swap uses single token liquidity. You can provide liquidity for a token on Twin Swap just by locking that one token. Swap users can now buy and sell to and from those tokens deposited.
Let's see an example:
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Allowed tokens in TwinSwap: BNB, BTC, BUSD
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Alice deposits: 1 BTC
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Tokens in TwinSwap: 0BNB, 1BTC, 0 BUSD
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Now Bob can trade with those BTC even thought BTC is the only token locked.
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(Assuming 1BNB = 100$, 1 BTC = 10,000$ and BUSD = 1$)
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Bob can sell 10 BNB to the exchange and receive 0.1 BTC
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Bob can also sell 1,000 BUSD and receive 0.1 BTC
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At the end, the swap will hold: 10 BNB, 0.8 BTC, 1,000 BUSD.
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When Alice withdraws it's 1BTC she will get a mix of tokens
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but with the same $ value that she deposited
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Liquidity Withdraws

If alice only withdraws 0.1 "TwinSwap BTC LP" the tokens received will be BNB and BUSD, the value of BNB and BUSD tokens received will be equal to the value of 0.1 BTC.
Holding "TwinSwap BTC LP" Tokens does not mean you have BTC tokens or that you can withdraw them, it is a deposit token that entitles you to the balue of the btc you deposited, but this can be payed out in any other token the swap holds

Impermanent loss

Similar to how you can have impermanet losses when adding liquidity pairs to other AMM exchanges, something similar happens on TwinSwap.
In a AMM like PancakeSwap or Apeswap, impermanent loss happens when the supplied assets are bought are sold, leaving the LP provider with different amounts of each asset.
If you supplied 1BNB and 100BUSD. If BNB goes up, you will now hold 0.8 BNB and 120BUSD. This difference caused the impermenent loss in regular AMMs
For TwinSwap you always deposit a single asset, but when preople trade this asset it gets swap for other tokens like BUSD, and thus you are also exposed to similar impermanent loss because your 1BNB deposit will get you 0.8BNB + x BUSD, like in the previous example.

Fees

The fee is divided by tiers designed to balance the swap holdings:
  • 0% for trades that help balance the swap
  • 5%,10%, 20%, 40% for trades that unbalance the swap
If the end swap state is unbalanced by 20%, the fee is 5%
If the end swap state is unbalanced by 50%, the fee is 10%,
If the end swap state is unbalanced by 80%, the fee is 20%,
The fee is applied for both sides of the trade, if you swap BUSD for tNDX, it will see how unbalanced BUSD is, and how unbalanced tNDX is. The sum of both fees is the one displayed on the ui.
All fees are used to burn TWIN tokens thus giving it more value.
LP providers who do not stake in the farms do not earn any rewards
Last modified 3mo ago
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Contents
Diferences