SpiritSwap is a Fantom-based decentralized exchange (DEX) that utilizes the same constant-product automated market maker (AMM) as Uniswap.
Aggressive expansion is the name of the game in many industries, especially in the blockchain and decentralized finance (DeFi) space, which has rapidly growing Web3 companies focused on getting the largest slice of the pie. But some have learned that it doesn’t always work out, and have preferred to step back and select a more conservative yet proven way to compete, and that is through organic growth.
Table of Contents
Background
Unlike other web3 projects aggressively promoting their platforms to build a massive community in the earliest way possible, SpiritSwap, a decentralized exchange (DEX), decided to go the opposite route. It aims to grow its community organically to build a genuinely strong foundation and be one of the major liquidity providers in the Factom blockchain.
What is SpiritSwap?
SpiritSwap is a Fantom-based decentralized exchange (DEX) that utilizes the same constant-product automated market maker (AMM) as Uniswap.
The AMM component is one SpiritSwap’s most important aspects as it only requires liquidity providers to deposit a pair of tokens, and an algorithm will automatically make a market for the token pair.
This secure and convenient automation eliminates a big burden for liquidity providers, making their profit-making as easy as possible. Through Uniswap’s AMM, SpiritSwap traders can effortlessly swap between tokens and get guaranteed returns for their swaps.
Fees generated from these swaps will be spent by the system as payment for the liquidity providers.
Major Pools and Services
The platform will initially launch four major incentivized pools, which are “FTM-SPIRIT,” “FTM-WBTC,” “FTM-USDC,” and “FTM-WETH.”
More pools will be added as the project progresses, but it will only focus on Fantom-based tokens. Other major services of SpiritSwap are the trading, staking, and farming of its native utility token called the SPIRIT token.
Users can earn a percentage from each trade done in a pool when they stake their SPIRIT LP tokens in any of SpiritSwap’s farms.
Also, with the platform’s design and Fantom Opera’s capabilities, SpiritSwap can easily deliver cheaper and speedier transactions than Ethereum.
Farming
One of the main focuses of the platform is to provide incentives to its liquidity providers and encourage them to stake their digital asset pairs in the market to increase liquidity.
Liquidity providers are a crucial part of the SpiritSwap, as they help promote the adoption of the platform by staking or including assets in select liquidity pools or the “farms.”
And as a prize for their efforts, they are rewarded with SPIRIT tokens based on their relative contributions.
And as a reminder, rewards can only be finalized once necessary adjustments and correction parameters have been ironed out.
Through these ways, SpiritSwap can function well as a decentralized exchange and provide its users easy access to its SPIRIT token.
Why Fantom Protocol?
Fantom Protocol is an ideal blockchain platform for a DEX like SpiritSwap as it provides low gas fees, EVM compatibility, short block times and is more decentralized than Binance Smart Chain.
SpiritSwap can seamlessly deploy these core services on top of its own features, enabling it to provide increased efficiency and security without burdening its users.
SpiritSwap Tokens
SPIRIT Token
SPIRIT Token is SpiritSwap’s fungible token, with a 1 billion supply, and serves as an economic incentive for users to encourage them to be active participants of the platform.
SPIRIT Distribution
| Farm | 81.82% |
| DAO | 8.18% |
| Development | 7.50% |
| Airdrop | 2.5% |
Without SPIRIT, the platform can fall apart as there will be no incentive mechanism that would stimulate its economy, rendering its platform useless.
inSPIRIT Token
inSPIRIT is SpiritSwap’s governance token equipped with a vote-locking model and provides users with benefits that include voting power, increased farming rewards, and participation rewards.
Through the inSPIRIT token, holders can earn fees for using the protocol, receive valuable airdrops, and enjoy an annual percentage yield (APY) boost.
While it’s not transferable, the team plans to equip the token with more features in the near future to increase its use case.
How to Acquire inSPIRIT
To acquire inSPIRIT tokens, platform users must first lock SPIRIT tokens depending on their preferred time frame, which can be between 1 month to 4 years.
If users lock their SPIRIT tokens for a longer time, they will be rewarded with a larger amount of inSPIRIT tokens.
Farm Boost
Platform ‘farmers’ that hold inSPIRIT tokens have the opportunity to receive a max boost of up to 2.5x farming rewards, increasing their assets further with less effort.
winSPIRIT Token
winSPIRIT is another term for “wrapped” inSPIRIT tokens, which has two versions, called “ginSPIRIT” and “linSPIRIT.”
This type of token, which is transferable, is created by auto farms by locking SPIRIT tokens literally forever to increase the annual percentage rate (APR) of their SpiritSwap boosted farm vaults.
The downsides of winSPIRIT include no APY boost, no airdrops, and no voting on boosted farm allocations.
But the biggest and riskiest downside of all is that winSPIRIT contracts are not created and audited by the SpiritSwap team, and users are reminded to use them at their own risk.
Cyber Risk
Even with advanced security features in place, the SpiritSwap team recognizes that the platform can still be vulnerable to various types of risks.
Malware attacks, Sybill attacks, consensus-based attacks, and denial of service attacks are some of the biggest risks that SpiritSwap might face.
But the team has assured that the ongoing improvements on its security infrastructure can minimize these cyber risks from taking place inside the platform.
Conclusion
A focus on organic growth is what we consider a green flag when we’re reviewing Web3 projects, as it describes the team’s real intention of improving their platform and solidifying their community.
Fortunately, SpiritSwap has this on its top list and when combined with other features such as its Fantom Opera blockchain and farming offerings, it’s a promising DEX platform that investors should take a look at.
