According to a decentralized platform, it is working on creating a DeFi ecosystems network and is offering an innovative hybrid model that will combine liquidity mining and transaction-fee mining in one platform. MiniSwap states that serious issues have been unearthed in centralized platforms, even though crypto exchanges currently maintain trading volumes worth billions of dollars every single day. The team highlighted the sorry story of Quadriga, the Canadian crypto exchange that lost customer assets having a value of nearly $190 million, as the owner passed away.
While the project believes that it is possible to eliminate trust issues with decentralized platforms because traders are able to buy and sell cryptocurrencies on a peer-to-peer basis, MiniSwap claims that even decentralized exchanges have downsides that need to be resolved. Three of the biggest problems are unfairness, sustainability, and long confirmation latency. In addition, giving incentives to liquidity providers to get them involved can be a big challenge because of ‘flawed incentive designs’. MiniSwap is planning to change this by encouraging liquidity providers and traders alike to become part of the ecosystem.
The project also claims that their approach is sustainable because it makes use of a mining process that can last for 100 years. The white paper of the project warned that the status quo cannot be maintained for long. It said that numerous exchange platforms have been established to help people in trading their coins, but most of them are centralized platforms that need private keys to be accessed. Put simply, traders would have to rely on the services that are provided by these exchange platforms. Establishing such a strong trust is generally not possible and it is also in contradiction with the basic concept of a decentralized financial system.
This is where MiniSwap comes in as the project is developing an automated and decentralized trading platform based on the Ethereum blockchain. This would allow people to easily exchange any pair of tokens that are supported by Ethereum’s ecosystem. This is where a hybrid mining model is applicable. The white paper said that all participants, which include liquidity providers, traders, and MINI holders, will receive MINI for their contribution as reserving rewards, trading rewards, and community rewards, respectively. This will clear the launch of MiniSwap DeFi that will feature a bunch of decentralized financial products, including derivatives like futures and options.
Right now, DeFi has been identified as one of the fastest-growing sectors within the crypto industry. The team behind MiniSwap has said that this stage is crucial for them to ensure MiniSwap becomes an ecosystem rather than just another exchange service or liquidity pool. Lastly, the team also has some major designs for a service referred to as MiniSwap Global, which would help its DeFi platform in communicating across distributed ledgers, thereby allowing traders to trade seamlessly from different blockchain platforms. While liquidity mining and transaction-free mining are not new concepts, MiniSwap claims that the past attempts for delivering them have been rather unsustainable.