Apollo’s Moonshots: Chainflip is working to create a cross-chain decentralised exchange
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David Angliss, an analyst with Australia’s leading cryptocurrency investment firm, Apollo Capital, shares the fund’s weekly take on what’s happening in the fast-changing and volatile cryptocurrency space.
Uniswap revolutionised the decentralised exchange space when it launched in late 2018, with its easy-to-use interface and revolutionary trading protocol.
Instead of relying on a traditional order book, traders swap tokens using “liquidity pools” provided by users in exchange for rewards.
Uniswap facilitated 55 million trades transferring a total of US$294 billion in value, and its UNI token on Friday was the No. 11 cryptocurrency.
But just as Uniswap left previous decentralised exchange Etherdelta in the dust, an upcoming Aussie-created exchange could prove stiff competition for the incumbent leader, David Angliss says.
Apollo Capital agrees with bored Elon https://t.co/kcsXJ8wO8t
— Henrik Andersson (@phenrikand) July 8, 2021
Under construction by a Berlin-based team led by Melbournian Simon Harman, Chainflip aims to enable trustless cross-chain token swaps.
Right now Uniswap users can only exchange ERC-20 (Ethereum) tokens for other ERC-20 tokens, while users of imitator PancakeSwap can only trade Binance Smart Chain tokens for other BSC tokens.
“I remember when I first started in crypto, I was like, ‘why can’t I just easily trade my Bitcoin for Ethereum without using Coinbase?'” Angliss says.
“It’s something that’s obvious, but everyone just sort of makes do with that pain point. If it were resolved it would be pretty big, especially as a decentralised platform.”
(To be sure, there are workarounds for this issue. Wrapped Bitcoin and renBTC are synthetic ERC-20 assets on the Ethereum network that are backed by actual bitcoins, and thus can be swapped for other ERC-20 tokens on Uniswap. But that’s different from native cross-chain swaps).
Chainflip’s approach is similar to THORChain — also an Australian project — but Apollo believes that Chainflip will be more successful.
Chainflip says its customers will be able to use whatever wallet they want to use its DEX, rather than move their funds to a special wallet.
We are interested to see how it all works! And we’ll pinch any good ideas that surface from Chainflip 😅
Most exciting is the notion that arb between Chainflip <> THORChain will start to pull in Liquidity from CEX.
— THORChain #ACTIVATETHESYNTHS⚡️ (@THORChain) March 12, 2021
Chainflip will be powered by an ERC-20 token called FLIP, which will be available to the public via a liquidity bootstrapping pool on Balancer in the near future.
Apollo will be investing in the project, Angliss says.
The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.
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