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DeFi or Decentralised Finance has piqued the interest of many in the open finance sector and while Decentralized Exchanges (DEX) are thriving with this newfound interest among users, a major problem faced by them is that of liquidity fragmentation. With network congestion and poor scalability causing a surge in the network transaction fees, a solution was needed to meet these limitations.
Layer 2 solutions and sidechains have aimed to solve this problem, however, transaction barriers between blockchains prove to be a deterrent in that case. O3 Swap is aiming to solve all of these issues by implementing a cross-chain protocol to connect different blockchains and allow its users to exchange assets freely without any network isolation.
What is O3 Swap?
The O3 Swap is a proprietary cross-chain aggregation protocol by O3 Labs with the mission to provide cryptocurrency-based and financial services to its users by allowing them to exchange or ‘swap’ digital assets within their O3 Wallet. The O3 Wallet is an open-source decentralized wallet based on high-quality basic chains such as Bitcoin, Ethereum, and Neo.
The O3 Swap module is in its beta testing phase currently and is offering its users a one-click trade platform for assets on different blockchains. It is designed to give cost-effective rates to its users for asset swapping between blockchains and layer 2 networks.
The O3 Swap protocol provides for cross-chain interactions on Ethereum, Binance Smart Chain, Huobi ECO Chain, and NEO. It has also successfully completed its funding round and secured $2 million investments with participation from OKEx Blockdream Ventures, SevenX, Moonwhale Ventures, Puzzle Ventures, and NGC.
Integrating cross-chain liquidity pools
The O3 Swap platform provides the option of ‘cross-chain’ swaps to conduct exchange settlements without any regard to the limitations of an isolated blockchain network. ‘Cross-chain’ here refers to the fact that the exchange is executed after traveling across two or more separate blockchain networks.
With a cross-chain swap, the initial asset and target asset are deployed on two isolated blockchains which are otherwise non-communicative.
The O3 Aggregators along with the cross-chain pools (called the O3 Hub) provide form the backbone of the O3 Swap platform. While the O3 Aggregators are deployed on the mainstream blockchains and help users to find trading rates and routes in corresponding networks effectively.
The O3 Hub gives users cross-chain transaction services based on Poly Network and supports them to add liquidity by a single token from various chains in order to earn O3 rewards.
O3 is an application-based token that acts as a mediator on the O3 Swap network. The O3 token can be acquired by three methods, first is by receiving airdrops through early participation in product testing and community contributions. The second is through trade mining rewards that can be earned by using the O3 Swap platform, and lastly, through providing liquidity to cross-chain pools.
O3 tokens are in a locked state and upon unlocking through the above mentioned three ways can be used in the following ways-
- LP Staking- Users can use O3 to synthesize liquidity equity proof (LP) which can be further used for unlocking and mining
- Member rights- Users can stake O3 to obtain interest and transaction discounts which are allocated by Swap treasury
- Community governance- Users can take part in community governance by staking O3 to initiate proposals and participate in voting
The total limit of the O3 tokens is that of 100,000,000 pieces which are further divided into two distribution phases. The first phase has a total amount of 10,000,000 pieces and the second phase has an amount of 90,000,000 for distribution.
O3 Swap has a simplistic and minimal design which makes it easier for the users to navigate through it. The cross-chain swap itself is an easy 4 step process.
Step 1: Visit the O3 Swap website and select the ‘Swap’ option from the homepage menu.
Step 2: User is asked to connect their wallet and confirm the connection in the pop-up window. It is important to note here that New Swap supports O3 wallet and NeoLine, whereas ETH, BSC, Heco cross-chain swap supports Metamask.In the official version, the O3 wallet will support all chains and will available in the mobile version soon.
Step 3: The user can choose the ‘From’ and ‘To’ and enter the amount to exchange. By clicking on the ‘RFQ’ option, details such as the amount, value, trading route, rate, and fee can be seen. Once the user clicks on confirm, they are given the option to adjust the GAS fee.
Step 4: Once the transaction is complete, the user can check the transaction status on corresponding explorers.
About O3 labs
Established in Tokyo in 2017, O3 Labs aims to provide professional digital asset management tools and services to its ever-growing user base in over 40 countries all over the world.
It has a community of more than 20,000 people in Japan, China, Europe, the USA, Russia, and Korea. O3 Labs pioneered the O3 Wallet which has 100,000+ users and supports ETH, ERC-20, NEO, ONT, NEP5 assets. Solana is coming soon in O3 Wallet.
With a cross-chain aggregation protocol, O3 Labs is aiming to solve one of the major problems faced by users in the crypto space. While the O3 Swap platform is still in its initial launch phase, they have a lot of new features and developments lined up for the future. It would be interesting to see how O3 Swap makes its mark in the growing DeFi sector.
For more information, check out their website or their media platforms-
Disclaimer: This is a paid post and should not be treated as news/advice.
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