Citadel Swap: A dual-token DEX built on the Base protocol.

Joyce

2023-09-22 11:39

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Since the launch of the mainnet on August 10th, the Base mainnet TVL has reached $270 million, currently ranking third in L2, surpassing Zksync and second only to Arbitrum and OP Mainnet.

Currently, more than 300 projects have been deployed on Base, among which Citadel Swap has attracted attention from the community. Citadel is an innovative DEX + Launchpad built on Base Protocol. As a DEX, its introduction of a dual-token model ($FORT and $esFORT) can build flexible and sustainable liquidity strategies to support the Base ecosystem. In addition, the Launchpad section aims to support new protocols launched on Base, providing necessary tools for their launch, liquidity creation, and growth.

$FORT and $esFORT

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For DEX, the inflation issue of native tokens is a hurdle on the development path. DEX relies on providing competitive yields through rewarding liquidity providers with native tokens.

Dual-token economy can solve this problem to some extent. Citadel aims to solve this problem by implementing a dual-token model, which comes from the successful custody model of GMX. The model aims to ensure the long-term success of the protocol while allowing supporters to benefit from actual revenue through protocol fees.

FORT is the native token of Citadel. Together with $esFORT, it can be used as liquidity rewards for various staking protocols available on the platform.

esFORT represents a non-transferable custody token that plays an important role in creating a sustainable token economic strategy. By staking $FORT, rewards will be distributed in a ratio of 80% $esFORT and 20% $FORT. This means that most of the emissions will require a waiting period to become liquid, ensuring that limited partners and the protocol's long-term goals remain aligned and curbing any short-term selling pressure.

In order to increase user enthusiasm for holding esFORT, esFORT allows its holders to directly earn dividends from the protocol's profits.

Users can exchange esFORT back to FORT by pledging it. Citadel has set some ratios and output rates to adjust, with a minimum duration of 15 days and a ratio of 0.5:1, which will output 50% FORT; the maximum duration is 3 months, with a ratio of 1:1, which will output 100% FORT.

For dividend recipients, $esFORT holders will be eligible to receive 25% of the total protocol revenue. These rewards are distributed on a weekly basis, while ensuring that users always enjoy the benefits.

Citadel ensures that there is always sufficient liquidity on the platform to ensure smooth trading. Whenever someone exchanges tokens on Citadel, 60% of the 0.25% transaction fee is extracted and returned to the liquidity pool as a reward for liquidity providers.

Token Economics

FORT emissions will be distributed over a period of 2.5 years and will reach maximum supply (100,000,000 FORT) in April 2026.

Although the theoretical maximum supply is 20,000,000 tokens, considering that esFORT will distribute 6,720,000 tokens with a 90-day vesting period and redeem them at a 1:1 ratio, the actual supply may be much lower.

CitadelPad

CitadelPad will be the first launchpad to support four types of sales, allowing projects to choose the best way to launch. $FORT will enjoy exclusive benefits on CitadelPad.

esFORT holders will benefit in a different way on the Launchpad, with the opportunity for users to increase their chances of receiving allocations in the initial projects launched on the Launchpad by staking their esFORT tokens.

Citadel will announce the lock-up period of the staked tokens for the first batch of projects hosted on Launchpad, and users can learn how to earn more allocations.

Conclusion

Citadel will launch v3 DEX at the end of September. By the end of September, Citadel will integrate centralized liquidity, allowing liquidity providers to concentrate funds within specific price ranges. This centralized liquidity concept comes from Uniswap V3. By concentrating funds in high trading volume areas, it reduces slippage and improves trading efficiency, making liquidity more effectively utilized.

Citadel V3 hopes to allow liquidity providers to concentrate funds in smaller price ranges, thereby improving fund efficiency. At the same time, the arbitrary allocation of liquidity will also make the overall market more flexible, creating an efficient trading platform for the entire Base ecosystem.