How does Cross-Chain Swap Aggregator XY Finance Work
Because of the expanding number of new chains and the expanding number of NFT, GameFi, and DeFi projects and assets, it is becoming increasingly challenging for investors of all sizes to maximise their earnings. There are simply too many data points to manage all at once. Because of this, there has been a recent surge in demand for cross-chain exchange aggregators, which can assist with data distillation, increase profit-taking, and reduce risk. One such product is XY Finance, which has garnered a significant amount of support from investors operating in the sector as a whole.
Through its X Swap and Y Pool, XY Finance is able to provide services for the provision of single-token liquidity for the DeFi and Metaverse cross-chain swap markets. This swap is ergonomic and efficient. The purpose of X Swap in particular is to meet the need for cross-chain swaps between different chains, and the Y Pool is designed to reimburse liquidity providers for the fees and benefits associated with switching. It successfully concluded a funding round that brought in a total of $12 million from investors such as Infinity Ventures Crypto, Mechanism Capital, Morningstar Ventures, YGG (Yield Guild Games), Animoca Brands, and Circle (Circle Internet Financial), among others.
The Operating Model
XY Finance provides a distinct competitive edge over more conventional cross-chain aggregators as a result of the unique mix of two distinct components, X Swap and Y Pool. Users are able to choose and choose a service that is customised to meet their requirements because the operational model that this company uses enables its two primary constituent sections to specialise in extremely particular services.
XY Finance Liquidity Swap X Swap is a platform that enables cross-chain trading, while Y Pool is a platform that rewards governance tokens to liquidity providers and distributes a portion of the revenue generated by trading.
X Swap works to search for the optimal cross-chain and transaction path for users, supporting cross-chain swaps between any assets, and allowing users to swap assets on one particular chain or transfer/swap across two different chains. Y Pool works to incentivize liquidity providers with governance token rewards and a share of swapping fees. X Swap works to search for the optimal cross-chain and transaction path for users.
The user only needs to start a transaction on the first chain in order to use X Swap, despite the fact that it gives the impression of being a complicated method. The subsequent swap and cross-chain processes are carried out automatically by the protocol, which greatly simplifies the user’s ability to carry out transaction operations.
For instance, if you want to convert UNI on Ethereum to BUSD on BSC, you will need to first convert UNI on Ethereum to bridgeable assets (such as USDC, USDT, and so on) and then move to BSC through Y Pool or bridge partners (O3 Swap, Multichain.xyz, and AnySwap) before you can finally convert to BUSD. This is because you can only convert one asset at a time when converting between UNI and BUSD on B
X Swap now offers cross-chain swaps between Polygon, Ethereum, and Fanton, and Binance Smart Chain, and Y Pool has just lately opened its doors to provide liquidity provision services.
To this day, X Swap is almost entirely dependent on the liquidity provided by DEXes such as SushiSwap, 1inch, and Uniswap. The only DEX that works directly on XY Finance is X Pool, which gives users the opportunity to provide liquidity on XY in exchange for XY token rewards and earnings from swapping fees.
The fact that DEX Liquidity Y Pools allows users to control the liquidity of assets that are comparable across several chains using a single pool is its most significant competitive advantage. For instance, the USDT Y Pool is able to receive USDT assets from a wide variety of chains (such as receiving BEP-20 USDT, Polygon USDT, and ERC-20 USDT, amongst others), which enables it to provide liquidity for the X Swap. In addition, XY Finance is currently working on an incentive mechanism that will distribute XY Tokens to users that help rebalance assets on multiple chains. This token distribution will take place once the mechanism is complete.
Tokenomics XY and its Allocation of Tokens XY Tokenomics
Eighty percent of the swapping fees collected by X Swap are distributed to the liquidity providers who participate in Y Pool, while the remaining twenty percent are stored in the DAO vault. The DAO vault will also receive royalties from GalaXY Kats, which is a project developed by XY Finance NFT GameFi. Additionally, the DAO vault will use sixty percent of its total funds to repurchase XY Tokens from the secondary market, and it will burn fifty percent of the XY Tokens that it repurchases.
There will be a total of 100 million tokens available, with 35% of those tokens going toward GameFi awards and liquidity mining money, 24% going toward seed, private, and strategic investors, 15% going toward the team and advisers, 5% toward insurance, and 6% going toward bounties and marketing. On any chain that the protocol is able to handle, the XY Token will be made available for purchase. An IDO will be carried out on the Copper platform by XY Finance on the 9th of December.
XY Native Token
When XY is locked up in the staking pool, holders of XY will get the authority to vote on and propose modifications to the system specifications in real time. These changes can include the beginning of a new Y Pool. XY holders will also receive governance power. Additionally, in order to establish a security fund, XY Finance and the XY DAO will each receive a share of the swap fees collected.
Further Down the Roadmap
For the foreseeable future, XY Holders can anticipate plans to support Avalanche, Arbitrum, Cronos, and Ronin, as well as the introduction of an NFT liquidity aggregator called “NFT Satellite” before the end of the year 2021. Along with the NFT marketplace, it will also support other network chains such as Solana, Polkadot, and Flow by the beginning of 2022. Additionally, XY Finance will launch an NFT “Sweeper,” as well as an NFT Wrapper, and they will enable limit order swaps.
XY Finance Roadmap
Overall, XY Finance is an essential component of the infrastructure that must be developed in order to produce a cross-chain swap aggregator that is both effective and user-friendly. It carries with it the possibility of advancing the provision of single-token liquidity and enabling cross-chain aggregation across GameFi, NFTs, and the Metaverse. It will be interesting to observe if or not XY ends up being the underdog winner in the cross-chain swap industry.