July 14, 2021, | AtoZ Markets – OrionSwap is one of the newest and most reliable AMMs that have launched on the Binance Smart Chain. The project’s goal is to help make DeFi a legitimate marketplace for investors around the world and to achieve this goal, OrionSwap believes that the sector needs more transparency and reliability. DeFi has the potential to be a legitimate investment vehicle for the people, governed by the people, and OrionSwap wants to help it get there.
To do this, the project is taking a variety of steps, such as taking a strong stance against flashloans by completely removing it from its offering. Flashloans have allowed a number of attacks on DeFi already, and while removing them doesn’t fully solve the issue, the project is hoping that it can at least set an example. It is also making an effort to educate the community as much as possible, and it is trying to build a community that would be self-sustaining
1) What can you tell us about OrionSwap? How does it differ from other AMMs?
OrionSwap is a platform that was built by fellow DeFi investors. After spending time as liquidity providers and yield farmers, we felt there were obvious areas of improvement. DeFi is still very new, but the dangers of getting completely wiped out in an attack, or the lack of information on exactly how everything works are huge barriers to its advancement.
We are different from other AMMs in a few critical areas. One is our removal of flashloans as you have already mentioned. However, there is another critical area related to trading fees. When we were building OrionSwap, we took the time to read the Uniswap whitepaper many, many times. We wanted to make sure we fully understood the math involved and that our contracts followed well-established best practices. During this process, we discovered all the other AMMs on BSC have made a major mistake in their pair contracts. While most platforms advertise a high percentage return to the liquidity providers on every trade, the amount the liquidity providers actually earn is much less. We made sure to do this math correctly in our contracts and it allows us to charge trading fees that are 10% less than our major competitors while also providing 10% more of the trading fees back to our liquidity providers. Even if people decide to keep their liquidity in other AMMs, we think this is information they need to know. We encourage everyone to learn about how these fees work and we wrote an entire article detailing the related math on orionswap.medium.com.
2) What do you think is holding DeFi back the most at the moment?
The barriers to entry are too high. Imagine explaining to your grandparents how to transfer money from their bank account into one of these blockchains so they can participate in DeFi. The process is convoluted and only accessible to the more tech-savvy investors. Now try and search the internet for a single source of information, articles, or a book. Books on investing in DeFi are non-existent and articles on the internet are spread all over the place. Even the smartest people in the room will take some time to figure out how everything works. This is the single greatest barrier for DeFi. The lack of information is followed by the famous quote of “do your own research.” However, people don’t know what to look for and are continually getting rekked as a result. The most important thing we can do is provide clear information for new members of the DeFi community. Secondly, the security of DeFi has to improve if it is ever going to be taken seriously as an investment vehicle. We have to stop the multimillion-dollar attacks that occur on a weekly basis. If these are allowed to continue, there is no future for DeFi.
3) How did you come to the idea to launch OrionSwap?
As we said, we are DeFi investors ourselves. We have used many of the popular platforms on Ethereum and the Binance Smart Chain. We experienced the difficulty of learning how everything works and understanding the unique market dynamics in DeFi. We have been impacted by attacks on the platforms we have used. Several of our devs were invested in PancakeBunny when they were attacked. This is where the idea was born to create OrionSwap. Initially, we wanted to focus on providing secure contracts that do not allow flashloans. Then we decided to write articles to help educate our community on the nuances of DeFi. We ourselves didn’t even know the math in most DeFi AMM contracts was incorrect until we started building OrionSwap. So even though we considered ourselves as very experienced DeFi investors, we soon found there was still a lot we didn’t know.
4) Your project has eliminated flashloans completely, but a lot of people believe they are necessary. How do you respond to that?
Even if you consider the valuable use cases like arbitrage and liquidations, the destruction caused by flashloan funded attacks far outweighs any benefits. If you spend some time examining arbitrage transactions, the large majority of those are in the hundreds of dollars and the people executing arbitrage are operating on super thin margins. They are more likely to self-fund those activities to increase their return instead of leveraging flashloans that will require an additional fee. Liquidations are another use case and it is true there currently is no great alternative outside of flashloans at the moment. However, it’s important for people to realize the reason there is no alternative is not because one doesn’t exist. There is likely a way to enable liquidations without allowing flashloans. Unfortunately, there is a profit incentive in the current flashloan mechanisms that earns money for the platforms that provide the loan. As it stands, they have no reason to change anything because it makes them a lot of money. They use misinformation about arbitrage and liquidation use cases to help entrench flashloans so they can continue to make money. Don’t forget, the hackers are not the only ones profiting from these attacks. The AMMs that provided funds for the attacks also made a profit as well.
5) Are there alternatives to flashloans that would be more adequate?
As we mentioned, for arbitrage, flashloans are largely useless. For liquidations, we should explore other opportunities to provide instant capital that have more checks on how that capital is used. Right now, flashloans simply check if the amount of money returned satisfies the loan conditions. There need to be additional checks to see how the money was used during the transaction. This could allow for use cases like liquidation or atomic loan replacement without allowing attacks on other DeFi platforms.
6) Do you think there is a lack of educational materials regarding DeFi, or is the problem the fact that materials are scattered all over the internet?
Both. There is definitely a lack of information available. You cannot find any books on the topic, and there are repositories of information scattered across the internet. It is really difficult to understand what sources are trustworthy and which of them pertains to the block chain you are interested in. This is a huge barrier that prevents ordinary retail investors from being able to participate in DeFi projects.
7) What do you mean by making the community self-sustaining?
The entire purpose of DeFi is the democratization of the financial system. Or said another way, it is to create a financial system that is controlled and governed by everyone. Having a platform that is controlled by a specific group of people brings with it the same issues that are seen in today’s modern banking system. We want our community to inherit the platform and govern its policies once we get the project stable. The community should set policies around token supply, new features, marketing, etc. Already, our community is instrumental in marketing our platform. Most of our marketing this far has been word of mouth and twitter, all of which is mostly supported by our existing community.
8) What can you tell us about your Starfield token?
The Starfield token is our platform governance token. It serves two purposes. First, it is given as a reward to members of farms and Galaxy pools. Second, when we enable voting on our platform, it will allow users to cast votes on any propositions. The percentage of tokens held by a user will determine the weight of their vote. We very purposefully did not implement any “fancy” features in the token. We stuck with tested and validated best practices and declined to implement features such as transfer taxes. While these are interesting features, they also leave the token susceptible to attack if not done correctly. Since this token is at the core of our platform, we wanted to make sure it was as secure as possible and limited these “fancy” features in favor of security. As of now, we have bought back and burned about 25% of all minted Starfield.
9) In what different ways can the community benefit from OrionSwap and Starfield token?
Most importantly, we are the first platform on BSC to correctly calculate trading fees in our pair contract. That means traders will benefit from lower trading fees and liquidity providers will get a larger portion of those fees. So, even without considering any other aspect of our platform, that is a huge benefit for everyone. Also, we do not allow flashloans. This not only protects the members of the OrionSwap community but also members of the entire DeFi space. When value is locked in our liquidity pairs, it can never be used to attack any other DeFi platform. In addition, the Starfield token has a lot of room for appreciation and can be very profitable for those who farm it. The leading project on BSC currently has a token price of $15 with a total of about 362 million tokens in circulation and a total market cap of about $5 billion. We currently only have 39 million tokens in circulation. If we target 10% of the leading platform’s market cap, that would provide our token an estimated value of $12 per token. Given it is currently trading for less than one penny, that leaves a lot of room for growth. It is still very early for our members.
10) Lastly, what are some short-term goals for OrionSwap that you wish to see accomplished over the next few months?
Our main objective over the next few months is to spread the word. We want everyone to learn about the misinformation they have been given from other DeFi projects regarding trading fees. We want to continue creating content that helps our community better understand how DeFi works and increases their confidence in this difficult market. Finally, we want to start putting the necessary infrastructure changes in place to allow voting on our platform. All of this is covered in the roadmap section of our documentation at docs.orionswap.finance.