The SaucerSwap DEX leverages both the Hedera Smart Contract Service (HSCS) and Hedera Token Service (HTS), inheriting the full advantages of the Hedera network. Ethereum uses the ERC20 standard for token operations such as mint, burn, and transfer. Here, tokens are themselves contracts and are beholden to the limitations of the EVM. On Hedera, however, token operations are performed on HTS.
This was made possible by recent HSCS upgrades allowing smart contracts to use HTS through EVM precompiles. The ecosystem is now more amenable to tokens created by and controlled through HTS, a development that Saucerswap takes advantage of. Developers can take full advantage of the network's consistent and predictable fee structure to create differentiated DeFi products on Hedera.
“The protocol is based on the Uniswap v2 constant-product formula,” said Joseph Bergvinson, Tokenomics Lead at SaucerSwap Labs. “Here, liquidity providers deposit a pair of tokens and an algorithm automatically makes markets for the token pair. Traders can easily swap between tokens in the AMM. These swaps incur fees, of which a portion is distributed to liquidity providers as payment for work. Furthermore, liquidity providers can stake their LP tokens in farms for additional rewards.”
The team intends to be a one-stop shop for DeFi on Hedera, offering a full suite of services including a token swap, liquidity pools, yield farms, single-sided staking, and more.
(i) HSCS interacts with HTS in such a way that tokens are not contracts (ERC20 standard), but are instead created by and controlled through HTS so that the network’s consistent and predictable fee structures can be taken full advantage of;
(ii) The network does not have a mempool, which renders frontrunning - a huge problem on blockchains - non-existent on Hedera;
(iii) HCS allows for DAO-based governance frameworks in which users can create ballots and cast votes in a decentralized, immutable, and transparent manner.
Ultimately, these native advantages of the Hedera network result in a more seamless user experience on SaucerSwap. Without worrying about being front-run, exorbitant gas fees, and exploitative backdoor arbitrage, every individual may access the protocol using the same technology with complete transparency and no unfair advantages.
SaucerSwap’s vision is to be a protocol that serves as an onboarding ramp for HTS projects in an emerging web3 economy and to incentivize bridging cross-chain liquidity to Hedera.
“As a DeFi protocol, SaucerSwap aims to maximize the Total Value Locked (TVL) on Hedera by offering a full-suite of services such as HTS project Community Pools, novel staking mechanisms, and other exciting features,” remarked Peter Campbell, Marketing Lead at SaucerSwap Labs. “This is going to accelerate the rollout of our vision and provide incentives for Hedera users to get involved in the world of DeFi.”
Additionally, SaucerSwap will interface seamlessly with HBARX, the liquid reward token of the Stader platform on Hedera - the leading liquid-staking protocol in the ecosystem.
The HBAR Foundation is excited to support features critical to the functionality of the SaucerSwap protocol, enabling Hedera to participate and lead the way in an ever-evolving DeFi landscape.
Together with the SaucerSwap Labs team, the HBAR Foundation is focused on identifying and adapting to developer and project needs — ushering in a new era of adoption, usability, and connectivity.
About the HBAR Foundation
Founded in 2021, the HBAR Foundation fuels the development of the Hedera ecosystem by providing grants and other resources to developers, startups, and organizations that seek to launch decentralized applications in DeFi, NFTs, CBDCs, Sustainability, gaming, and other sectors. In addition to providing funding through a streamlined grant process, the HBAR Foundation acts as an integrated force multiplier through expert support across technical, marketing, business development, and other operational functions that are required to scale.