QuickSwap Exchange Explained
by Tom Nyarunda
QuickSwap Exchange: What it is and how it works
This article examines QuickSwap, a modern cryptocurrency exchange that offers high-end crypto services for liquidity pools, enabling users to swap compatible cryptocurrencies. It will allow you to understand better this exclusive exchange, how it operates, the list of available tokens, and straightforward steps to use it.
As information and understanding about cryptocurrencies increase, the need to check and explore more than 100 popular crypto varieties can be overwhelming. Additionally, those coins are hosted by different blockchain networks with different token compatibility levels. Some platforms have ideated, designed, and launched liquidity pools into blockchain networks to address situations where the demand for some digital currencies is greater than the supply.
What is QuickSwap exchange?
QuickSwap is a layer-2 decentralized cryptocurrency application supported by the Polygon blockchain’s layer-2 scalability infrastructure and enables users to swap ERC-20 tokens. The forum operates an Automated Market Maker (AMM) tool and liquidity pools to reward community members. As a decentralized exchange (DEX), the platform is pivotal in the burgeoning decentralized finance (DeFi) ecosystem.
Launched in October 2020, only four months after the unveiling of Polygon’s Mainnet, the exchange uses a transparent, community-focused governance structure where only 3.25% of the token supply is reserved for the team. The remaining bulk of 96.75% is allocated to the community. Since it's a DEX, there's no need for Know Your Customer (KYC) protocols. A user only needs a compatible wallet and MATIC tokens for settling transaction fees.
As a layer-2 blockchain application, QuickSwap DEX offers numerous advantages, the greatest of which are reduced gas prices and lightning-fast transactions. By taking advantage of the Polygon layer-2 scalability solution, users can enjoy near-zero transaction fees and up to 65,000 transactions per second. Moreover, the platform aims to create a hassle-free experience for users interacting with DEXs and DeFi by creating a user interface that's easily accessible to even non-technical users.
The QuickSwap exchange offers swapping for numerous tokens and currently supports over 100 ERC-20 tokens in addition to at least 200 liquidity pools. Additional incentives include offering DeFi farming pools where users earn on the Proof-of-Stake (PoS) protocol by providing digital assets for lending. Currently, there are more than 80 farming pools from which to choose. Holders of QUICK, the protocol's native token, make up the community and can vote on anything from the commission to change the reward distribution algorithm.
QuickSwap offers functionalities that fill in gaps most leading DEXs leave. The main features include the following:
Layer 2 transactions: By leveraging Polygon’s main feature of fast transactions, asset exchanges on QuickSwap can take less than two seconds and cost a fraction of what the Ethereum network charges.
Non-custodial trading: Unlike centralized exchanges (CEX), users can trade directly from wallets like Metamask or others supporting ERC-20 tokens. This means you retain the private keys and total ownership of your tickets, unlike in CEXs, where to must deposit your assets in the platform’s exchange.
Yield farming: Users can contribute to liquidity pools and earn passive income through yield farming. A part of the amount charged as transaction fees is distributed equitably based on a user’s contribution to the collection.
Community administration: Token holders, who make up the community, retain voting rights on the platform, while stakers can profit from trading fees. They can vote to determine procedures and improvements in the protocol’s operations.
How QuickSwap works
QuickSwap is head and shoulders above conventional exchanges by creating liquidity pools of tokens that users can access for swapping. The platform operates the Constant Product Market Maker design, a variant of a model called Automated Market Maker (AMM). AMMs are smart contracts that regulate liquidity pools enabling investors to conduct smooth trades such as buy/sell crypto orders.
Instead of trading as makers and takers, users interact with a smart contract, a specialized Ethereum-based computer program that automatically handles and regulates token exchanges without third-party intervention.
Users can provide liquidity by depositing a pair of coins of equal value and, in return, receive liquidity pool (LP) tokens. The LP tokens are considered a receipt for the amount they have contributed to the pool and are burned as soon as a user reclaims their token. However, a user can also provide their LP tokens to third parties to use in yield farming, where the fees are constantly reinvested into the pool to earn compound interest.
How the platform makes its money
Unlike CEXs that make money by charging their users fees, the liquidity providers on QuickSwap earn transaction fees from the 0.3% fee on swaps made from the liquidity pools. Liquidity providers can claim the portion of earned fees equivalent to their proportion of overall liquidity anytime they want, and they're free to reinvest them.
## How to use QuickSwap
If you're interested in using the platform, you only need an internet browser on your PC or mobile device. You want to ensure that you visit the official website and follow the simple steps laid out below:
- Visit https://quickswap.exchange/#/ on your desktop or mobile browser.
- Connect a compatible digital wallet using a mobile wallet app or your desktop browser extension wallet – ensure your wallet supports the Polygon network – Metamask and Trust are good examples.
- Ensure you’re on the “Swap” tab before initiating transactions.
- Select the token you want to swap from and the token you’re interested in receiving.
- Click “Swap” – you’ll get a pop-up window asking you to review your selection.
- Review your transaction details in the pop-up window.
- Confirm the request in your digital wallet.
List of tokens available for swapping
QuickSwap supports more than 100 ERC-20 tokens, and the following is a list of a few exclusive ones – note that this list isn't conclusive. They include ZeroSwap Token and Yearn.finance Token, Wrapped Bitcoin, WOO Network Token, WazirX Token, and Vulcan Forged PYR Token.
Others are USD Coin, UniSwap Token, Unilend Finance Token, Unibright Token, TrustSwap Token, and Tether. The list includes QuickSwap Token, PlayDapp Token, Opacity Token, Matic Network Token, Mantra DAO Token, and IOI Token. You should find Ethereum, EasyFi Token, DSLA Protocol Token, DinoSwap Token, DeRace Token, Dai, Compound Coin, ChainLink Coin, Aave, and Celsius token in that long list of compatible tokens.
Available deposit methods
Like all other DEXs, QuickSwap doesn’t provide the option for fiat currency deposits, meaning that you can’t do any transaction without some crypto holdings. If you’ve never dealt with cryptocurrencies, you can easily buy your first crypto from any entry-level exchange accepting fiat currency deposits.
DEXs have their servers spread globally, meaning there's a lower risk of downtime and cyberattacks. Moreover, when you trade at a DEX, the platform doesn't touch your assets. Even if a hacker infiltrated the exchange, they wouldn't access your purchases, making them very safe.
Wrapping up QuickSwap
As the platform continuously increases the number of available token pairs, the protocol is on its way to becoming a prominent brand among layer-2 scaling solutions and DeFi platforms. Moreover, the icing on the cake could be a reasonable price for the QUICK token.
Tom is a freelance writer with over 15-years’ experience in content creation, blog writing, and SEO specializing in the blockchain and cryptocurrency niche. He is a philosophical figurehead who believes that to make our world a better place, we must invest in incorruptible products and procedures, of which Bitcoin and other cryptocurrencies are leading examples.