📜 A Little Background
AMM DEXes have caused an evolution in the Defi world, since they are changing the way users trade their cryptocurrencies. The creation of the liquidity pool enables traders to easily swap in a fully decentralized and non-custodial way. By utilizing the innovation of AMM, Uniswap becomes one of the most successful Defi projects. And we notice that lots of projects are attempting to improve AMM design with their own implementations.
Sushiswap, a Uniswap fork, brings us an AMM with the SUSHI token, which is a governance token. Unfortunately, Sushiswap didn’t do any improvement to the case of impermanent loss.
Inspired by Uniswap and Sushiswap, SakeSwap aims to improve the design of AMM in terms of price curves and contributor rewards. Let us explain more about our unique design.
🍶 Why SakeSwap?
SakeSwap is a fork of Uniswap and Sushiswap but with some key improvements.
- SAKE token
The SAKE token has two functions, which are entitling SAKE holders to governance rights and a portion of the fees paid to the protocol. Eventually, SAKE holders will own the protocol. SAKE tokens can entitle liquidity providers and traders to continue earning the benefit of the protocol development, which means the early adopters will be significant stakeholders of SakeSwap. Meanwhile, SakeSwap involves tokenomics of deflation to support the token price from a structural perspective.
◦ total supply
Unlike SUSHI Token that has unlimited total volume, we set SAKE token a limited total volume to avoid dilution and maintain project sustainability. Details of SAKE token distribution is explained in the Token Distribution part.
◦ burn and reward distribution
SakeSwap follows the transaction fee distribution of SushiSwap, namely 0.25% goes directly to the active liquidity providers, while the remaining 0.05% gets converted back to SAKE (obviously through SakeSwap). 90 % of the remaining 0.05 % will be burned and the rest 10 % will be distributed to SakeBar participants who deposit their SAKE to SakeBar.
- 50 % slippage capacity
Instead of arbitrators acquiring all the slippage in Uniswap, liquidity providers in SakeSwap are enabled to capture profits otherwise captured by arbitrageurs with virtual trading curves. In the case of spatial arbitrage, the AMM collects 50 % slippage capacity from arbitrage traders. As a result, the other 50 % will be shared among liquidity providers. The 50 % slippage capacity for liquidity providers can enlarge LPs’ income to ～200 % compared to transaction fee as income.
📈 Token Distribution
SAKE Token will be distributed in LP yield farming and traders trading mining.
Phase I. Yield farming: for Liquidity Providers
- default 100 SAKE per block
- 0.5 x in the first ~5 days (35,000 blocks)
- 10 x in the next ~15 days (100,000 blocks)
- 1 x in the last ~15 days (100,000 blocks)
Phase 1 mining supply: 0.5*100*35,000 + 10*100*100,000 + 100*100,000 = 111,750,000
To make the yield farming as easy as possible for current Uniswap LP token holders, Uniswap LP token holders, as we have learned from Sushiswap, can start farming directly by staking their LP tokens into SakeSwap.
After the 5-day beta test farming (0.5 x), we will have 15-day Accelerated Farming (10 x) to thank our early SakeSwap supporters.
The initial set of pools:
- CeFi Stablecoins: USDT-ETH, USDC-ETH
- DeFi Stablecoins: USDC-USDT, DAI-ETH
- Lending Protocols: COMP-ETH, LEND-ETH
- Synthetic Assets: SNX-ETH
- Oracles: LINK-ETH, UMA-ETH
- AMM: CRV-ETH, SWE-ETH
- Layer 2: STAKE-ETH, SRM-ETH
- Rebase Protocol: GRAP-ETH, YAMv2-ETH, BASED-ETH
- Mining Aggregator: YFI-ETH, YFII-ETH, SUSHI-ETH
- Delicacy: SAKE-ETH (10x reward)
- Surprise: ❓-ETH
When SAKE governance is online, SAKE holders can propose a change to the SakeSwap protocol. Changes might include adding new pools, changing the SAKE weight or sunsetting a current pool.
💻 Smart Contracts
🍶 SakeToken: the SAKE token contract
👨🏻🍳 SakeMaster: deposit Uniswap LP tokens to farm SAKE
👘 SakeMaker: collect revenues, convert to SAKE, and send to SakeBar
🍸 SakeBar: stake SAKE to earn more
👩💻 Migrator: migrate SakeMaster LP tokens from Uniswap to SakeSwap
🦄 Uniswap V2: for liquidity migration
We will keep updating the project process to GitHub.
SAKE Dev Fund is set up for project sustainability and project security audit. 6% of every SAKE distribution is set aside for future iterations and the implementation of governance proposals. All bills for security audit will also be paid by the fund.
Before the launch, the bugs reported by the Sushiswap and Uniswap security audit have been fixed. SakeSwap related contracts have yet to be professionally audited, and the team will update the security audit on Twitter and Discord. Stay tuned.