To begin, KuSwap is not just an AMM, it's much more with utility rapidly increasing around it's native token $KUS
KuSwap is the #1 Automated Market Maker protocol built on top of the KuCoin Community Chain (KCC), and it debuted on its own Launchpad in June 2021, which also happened to be the first KuCoin Community Chain crowdfunding.
KuSwap is the first to offer yield farming and AMM with the lowest platform transaction fees (0.1%), with fees refunded in KUS, our native currency. This network ensures increased performance and much lower network transaction costs. KuSwap aspires to establish itself as the market's leading DEX platform for token swaps.
The launch of KuSwap was the first catalyst for the KuCoin Community Chain to experience record-breaking transactions. KuSwap's key objective is to increase decentralized worldwide adoption by increasing the utility cases for KUS.
What Makes KuSwap Unique?
KuSwap, in its full form, is an ecosystem on its own within the larger ecosystem of KCC (KuCoin Community Chain).
It consists of a Launchpad, a Lending Platform, a truly decentralized NFT Marketplace, and KuDrops - a built-in element of KuSwap that is designed to promote information campaigns, community development, and to maintain the community at its best at all times.
Through KUSDAO - KuSwap's governance platform where holders stake on proposals and contribute to making the KuSwap permissionless and decentralised, and hence efficient and secure for all users.
Yield farming on KuSwap lets users that are providing liquidity earn KUS rewards by locking their LP tokens into a smart contract. The incentive is to balance out the risk of impermanent loss that comes along with locking in your liquidity.
Through these platforms, a vast array of utilities can be found in the KuSwap token, thereby making it an invaluable asset to users of crypto and Decentralized Finance.
The KuSwap protocol is a peer-to-peer1 system designed for exchanging cryptocurrencies KRC-20 Tokens on the KuCoin Community blockchain. The protocol is implemented as a set of persistent, non-upgradable smart contracts; designed to prioritize censorship resistance, security, self-custody, and to function without any trusted intermediaries who may selectively restrict access.
How does the KuSwap protocol compare to a typical market?
To understand how the KuSwap protocol differs from traditional exchange, it is helpful to first look at two subjects: how Automated Market Maker design deviates from traditional central limit order book-based exchanges, and how permissionless systems depart from conventional permissioned systems.
Order Book VS AMM
Most publicly accessible markets use a central limit order book style of exchange, where buyers and sellers create orders organized by price level that are progressively filled as demand shifts. Anyone who has traded stocks through brokerage firms will be familiar with an order book system.
The KuSwap protocol takes a different approach, using an Automated Market Maker (AMM), sometimes referred to as a Constant Function Market Maker, in place of an order book.
At a very high level, an AMM replaces the buy and sell orders in an order book market with a liquidity pool of two assets, both valued relative to each other. As one asset is traded for the other, the relative price of the two assets shift, and a new market rate for both is determined. In this dynamic, a buyer or seller trades directly with the pool, rather than with specific orders left by other parties. The advantages and disadvantages of automated market makers versus their traditional order book counterparts are under active research by a growing number of parties. We have collected some notable examples on our research page.
The second departure from traditional markets is the permissionless design of the KuSwap protocol. Permissionless design means that the protocol’s services are entirely open for public use, with no ability to selectively restrict who can or cannot use them: anyone can swap, provide liquidity, or create new markets at will. This is a departure from traditional financial services, which typically restrict access based on geography, wealth status, and age.
1 KuCoin Community Chain protocols are sometimes referred to as peer-to-contract systems as well. These are similar to a peer-to-peer systems, but with immutable, persistent programs known as smart contracts taking the place of a peer.
A peer-to-contract system facilitates peer-to-peer functionality, but uses immutable, persistent programs known as smart contracts to automate some processes.