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Zilliqa announces its entry in DeFi with Zilswap to be built by Switcheo

Photo of: Sangeetha Golchha
by Sangeetha Golchha

Zilliqa is all set to enter the Decentralized finance space with a new decentralized exchange built by Switcheo. 

Zilliqa is the world’s first public blockchain that has been built entirely on sharded architecture. It is known to solve the prevailing issue of scalability using its sharded technique. This allows the blockchain to scale in a linear fashion as the network increases in size. It has the innate ability to handle a large volume of transactions making it suitable to meet enterprise needs. Zilliqa is absolutely safe by design in a smart contract language called Scilla. This innovative programming language addresses many known security vulnerabilities that are present in other languages.

Now, it is collaborating with Switcheo marking its entry into mainstream DeFi and spreading its excellence across. Switcheo is the first decentralized crypto exchange on the NEO blockchain which now allows trading of EOS, Ethereum, and NEO tokens. It later added atomic swaps and allowed users to trade ERC-20 tokens as well. Its focus is to build an open and decentralized financial network that proffers world-class trading experience. The marked improvements in the network take place so that the users are able to trade freely and securely with one another. 

In a major announcement on its website, it said that Zilliqa’s first DEX will be called Zilswap and it is set to be a fully on-chain decentralized exchange that will run on Zilliqa.2 The entire architecture of the DEX was built by its in-house developers. It will use an AMM model on a permissionless liquidity protocol just as the way Ethereum’s leading DEX Uniswap uses. 

The announcement read:

Zilswap will be at the core of Zilliqa’s push into the decentralized finance (DeFi) space by allowing users to trade digital assets on the Zilliqa blockchain for the first time.

Users will be able to trade ZIL or ZRC tokens directly on the Zilliqa blockchain directly from their wallets. They could also add tokens they hold to a liquidity pool and earn passive income. The platform launch is stated to start with  ZIL-XSGD as the first token pool which will allow users to enter or exit ZIL through Singapore dollar-backed XSGD. 

Users holding ZIL and XSGD will be able to contribute to liquidity pools on Zilswap so that they could earn from the fees of each trade. For the users who do not have XSGD have the option of converting SGD to XSGD at a 1:1 rate through the Xfers platform which was created. 

In the future, there also will be a ZRC-2 governance token for Zilswap soon. Moving forward Zilswap will change the control of Zilswap to a DAO which will be controlled by ownership of governance tokens. All the important parameters such as protocol fees, project decisions, etc will come under the scope of the DAO. The governance tokens will be given to liquidity providers and users of the Zilswap platform. 

Keep reading for more on this!