Abstract

QuickSwap is an automated market maker on the Polygon network and is a copy of Uniswap. They both use the same liquidity pool model. Users add token pairs to liquidity pools and earn trading fees from users who use the pool to exchange tokens.

QuickSwap is widely favored because of its fast settlement speed and low fees on the Polygon network. QuickSwap is also compatible with the Ethereum blockchain and can exchange ERC-20 tokens. However, users are also exposed to the risk of impermanent losses.

QuickSwap’s cryptocurrency is called “QUICK” and can be easily bought and sold on Binance. In addition, you can also use QuickSwap’s liquidity pool to exchange other tokens for QUICK.

Introduction

QuickSwap and other automated market makers (AMM) are in the field of decentralized finance (DeFi) very popular. The Uniswap model has become the standard for different blockchains and Layer 2 platforms. QuickSwap has the same functionality as Uniswap, but the difference is that the former relies on the Polygon network instead of Ethereum. QuickSwap is a fork of Uniswap, but the main differences between the two make QuickSwap win the favor of some users.

What is QuickSwap?

QuickSwap is a fork of Uniswap, created by Nick Mudge and Sameep Singhania on the Polygon blockchain platform. It uses the Automated Market Maker (AMM) model to create a decentralized exchange platform (DEX) for users to exchange tokens. QuickSwap has no order book, and users trade in a token pool called a "liquidity pool."

Users can transfer ERC-20 tokens from Ethereum to Polygon, and trade any token pair through QuickSwap as long as a corresponding liquidity pool exists. Simply provide token pairs to create new liquidity pools and earn trading fees from other users.

QuickSwap’s interface, operational look and feel and user experience are almost identical to Uniswap. Users do not need to register or complete any KYC (identity verification) process to trade held tokens. Simply link your wallet to the platform and pre-deposit MATIC to pay transaction fees. QuickSwap is also an open source product, using Uniswap's audited code to gain a certain degree of trust and security.

What is Polygon (MATIC)?

Polygon (previously known as "MATIC") is an infrastructure for creating Ethereum-compatible networks. These blockchains can also interact with each other to establish an interconnected blockchain Layer 2 ecosystem. Polygon Network is the official side chain of the project and uses a proof-of-stake consensus mechanism to ensure security.

Fast expansion solutions and low fuel costs make the Polygon network attractive to many users. Transaction fees are paid in MATIC tokens. The network is compatible with the Ethereum Virtual Machine, and developers can fork existing DApps (decentralized applications) (such as Uniswap forking out sidechains).

Why not use Uniswap but choose QuickSwap?

Many users choose Polygon because of its fast transaction speed and low fees. Liquidity providers and exchangers can use Uniswap’s audited code and enjoy the benefits of the ERC-20-enabled Polygon network. A big benefit of this move is that ERC-20 tokens can be traded using a simple blockchain bridge, circumventing Ethereum’s high fees. Therefore, QuickSwap strikes a balance between Ethereum compatibility, simplicity and ease of use, and price advantage.

How does QuickSwap work?

QuickSwap uses an automated market maker model to create a liquidity pool for exchanging tokens. Users do not trade as placeholders or takers, but interact with smart contracts. Simply deposit a pair of tokens of equal value to provide liquidity.

Liquidity providers are rewarded with Liquidity Pool (LP) tokens as a receipt for their share of the pool. When the tokens are exchanged, these LP tokens are also destroyed. These tokens can also be provided to third parties for liquidity mining. Earnings are continuously reinvested in the pool, generating compound interest.

QuickSwap’s AMM model rewards 0.3% of the fee to all liquidity providers, based on each person’s proportion of the liquidity pool. Token prices are not determined through the order book, but by the "constant product market maker model".

Let’s take the ETH/DAI liquidity pool as an example. ETH is the variablex, and DAI is the variabley. According to the "constant product market maker model", x is multiplied by y to obtain a constant valuek.

x * y = k

The liquidity pool provides the exchange rate. In this example, 3,000 DAI (y) can be exchanged for 1 ETH (x). Inject 3,000 DAI into the capital pool and withdraw 1 ETH. The supply of DAI increases and the supply of ETH decreases. Sincek is constant, the price of ETH rises. In other words, users buy ETH with DAI. As ETH is gradually withdrawn from the capital pool, its price will continue to rise compared to DAI. The figure below shows the quantitative relationship between the two tokens.

What is impermanent loss?

What liquidity providers face Risk of Impermanent Loss. If the token price changes compared to when it was invested, the dollar value of the final redemption will decrease. Please note that this will happen if the price rises or falls. Losses are impermanent because they are incurred only when funds are withdrawn from the liquidity pool.

If the price returns to the original level, the impermanent loss will be reversed. Of course, dividends can sometimes exceed impermanent losses. To learn more and explore the math behind impermanent loss, read our guide to What Is Impermanent Loss?

How to make money with QuickSwap?

Unlike centralized trading platforms, QuickSwap does not make profits by charging users. Liquidity providers are the ones who actually earn transaction fees. Like Uniswap, it charges a 0.3% fee for exchanging tokens using liquidity pools. Users can claim earned trading fees at any time, or even reinvest them, and then receive fees proportional to liquidity.

How to use QuickSwap?

QuickSwap can be accessed via a desktop web browser or mobile device. The following link must be used: quickswap.exchange. Choose a liquidity pool, stake your tokens in it, and easily earn fees.

1. Access the quickswap.exchange page through a desktop or mobile browser;

2. Associate the wallet. If you need to use a desktop browser plug-in wallet or mobile wallet App, MetaMask and Trust Wallet are both good choices. Additionally, the wallet should also support the Polygon network.

3. Click the [Exchange] tab to start exchanging tokens.

4. Select the tokens you wish to exchange and receive. In this example, we exchange MATIC for PBNB.

5. Click [Exchange].

6. Preview the transaction in the pop-up window, and then confirm the transaction request in your personal wallet.

QuickSwap (QUICK) Token

QUICK is an ERC-20 token and also part of QuickSwap Governance token, launched in February 2021. 90% of the total token supply is awarded to liquidity miners, allowing liquidity providers to become platform shareholders. QuickSwap adopts a governance model common to other DeFi projects, including Uniswap and PancakeSwap. QUICK holders can create proposals and vote on new features or changes to the platform.

How to buy QUICK on Binance

QUICK has been listed on the Binance exchange platform. Currently, you cannot purchase QUICK using a credit or debit card, but you can exchange QUICK tokens via cryptocurrency. Binance offers the following trading pairs: BNB, BTC, BUSD, and USDT.

If you are not ready to exchange QUICK’s cryptocurrency, you can use the [Buy Coins with One Click] tab on the Binance homepage [Credit/Debit Card] Services. Read our guide on How to Buy Bitcoin on Binance Using a Credit or Debit Card to learn more.

If you hold BUSD, BNB or BTC, please visit the [Classic] trading page and select the token you wish to trade in the upper left corner. currency pair. You can use the search function to narrow it down.

In this example, we choose QUICK/BUSD. On the right side of the screen, enter the total amount you wish to buy in BUSD. The fastest way to buy QUICK is to use a market order in the spot market to buy QUICK at the current market price.

Finally, click [Buy QUICK] to submit the order and confirm the details.

How to sell QUICK on Binance

The steps for selling QUICK are many of the same as in the tutorial above. QUICK tokens need to be deposited into the Binance spot wallet. Tokens in the external wallet first need to be transferred to the spot wallet. Visit the [Fiat Currency and Spot] interface and click the [Recharge] option next to QUICK in the [Cryptocurrency Balance] tab.

For detailed instructions, please read the "How to Deposit on Binance" guide.

Visit the [Classic] trading page and select the token pair you wish to trade in the upper left corner. You can use the search function to narrow it down. In this example, we search for QUICK/BUSD.

The fastest way is to use a market order to sell QUICK at the current market price. On the right side of the screen, click the [Spot] tab and select [Market Order] as the order type. Enter the quantity of QUICK you wish to sell and click the [Sell Quick] button.

Summary

QuickSwap is a decentralized transaction A new approach to tokens. Compared with Uniswap or other AMMs on the Ethereum network, you only need to use a Polygon address and a small amount of MATIC tokens to trade ERC-20 tokens, and it is faster and more cost-effective. However, this feature has difficulty attracting users in the long term. Facing the upcoming Ethereum 2.0, QuickSwap may fall behind in terms of fees and speed.