Project Serum announces its own automatic market maker (AMM), the Serum Swap, based on the Solana blockchain. This is a direct challenge to the Ethereum blockchain, which has witnessed a lag in transactions and high gas fees as the DeFi application growth exploded in the past few months.
The new Serum Swap AMM will work similarly to other decentralized AMMs in that you can join a liquidity pool and trade cryptocurrencies on the platform seamlessly.
Serum is a platform launched by Sam Bankman-Fried, CEO of FTX Exchange as a competitor to Ethereum – providing a faster and cheaper platform to complete your decentralized finance, DeFi, trades. While Ethereum promises up to 15 transactions per second, the Solana-based Serum Swap “takes about 1 second” to settle a trade or pool addition/removal, and the gas fees at a low of roughly $0.00002 per trade.
At launch, SBF Almeda, as Sam is known on Twitter, announced the Serum Swap platform would offer users over 1 million SRM tokens, native to Serum, to incentivize saving and trading on the AMM. Liquidity providers and traders on the platform will receive these airdropped SRM tokens as additional rewards for their kick-starting actions until November 25 – representing a 600% APY.
Serum continues its fight in the DeFi space with the Swap launch following the recent addition of Circle’s USDC stablecoin – a widely used asset in the ecosystem – and the launch of the Solana-Ethereum bridge, named “Wormhole.” The bridge aims at offering DApps on Ethereum, a direct channel to a scalable and low fee transaction platform.
The platform charges a taker’s fee of 0.3% payable in SRM – 0.25% goes to the liquidity providers (LPs), 0.04% goes to an SRM buy/burn depending on profits and losses made 0.01% goes to the GUI hoster.
While Ethereum’s Uniswap remains the largest swap and AMM in DeFi, with over $2.87 billion in locked value (TVL), a jam and fee raise experienced in the last bullish run could see several investors switch to cheaper and faster platforms.