You may have heard of Ethereum, Binance or Solana decentralized exchanges but have you ever heard of Cardano DEX? Thanks to SundaeSwap, Cardano(ADA) blockchain now officially has its own decentralized exchange that facilitates the trading of Cardano tokens like PAVIA crypto and more.
Launched in 2022, the project had a rocky start due to network congestion. Despite the shortcomings, it is all set to become the benchmark for all the upcoming DEXes on the Cardano blockchain.
Can SundaeSwap match the user’s expectations? Can it become a valuable exchange like PancakeSwap Crypto (CAKE) and should you hold the SUNDAE token? Let’s find out in this review –
What is SundaeSwap?
SundaeSwap is the first open-source, decentralized exchange built on the Cardano blockchain. It facilitates token swapping by allowing liquidity providers, provide liquidity to its liquidity pools. Users who bring liquidity to the pools will receive Liquidity Pool tokens (LP tokens) and pool rewards.
Developed by SundaeSwap Labs, the launch team has 8 members led by Mateen Motavaf who is the current CEO of SundaeSwap exchange. Mateen has worked as head of strategy and lead UI/UX designer at a tech startup.
At SundaeSwap, he is responsible for the project’s branding, business development and UI/UX design.
SundaeSwap Labs is funded by three investors namely cFUND, Alameda Research and Double Peak Group bringing in $1.3 million. SundaeSwap works similar to popular AMM (Automated Market Maker) like SushiSwap crypto exchange with eUTXO i.e “Extended Unspent Transaction Outputs”, a novel accounting and execution model which will be discussed later in the post.
What is SundaeSwap coin SUNDAE?
SundaeSwap Coin or SUNDAE is the native token of SundaeSwap decentralized exchange. It works similar to the Uniswap UNI token and has the following use case –
Governance:
SUNDAE token will help users participate in key decision-making proposals that can shape the direction of the project. Users holding SUNDAE can vote on key governance proposals and can also delegate their tokens to another address for voting.
Finally, we gave a demo of our L2 governance solution that we've been building.🏛️
— SundaeSwap Labs 🍨 (@SundaeSwap) August 3, 2022
This will be part of a 3 stage governance system and we've built it out so that other projects will be able to utilize it as well.✨ pic.twitter.com/wlXy7dyB92
Users participating in Governance proposals are rewarded by the exchange
Profit Sharing:
Holders of SundaeSwap tokens are eligible for special rewards that come in the form of profit sharing. The income generated by the platform will be distributed to the token holders which is a part of its decentralized ecosystem.
The details of the exact mechanism or the math behind it is yet to be shared by the team.
Reduced Fees:
SUNDAE token will help the high volume traders reduce their overheads by paying for the fees at a reduced rate. From institutional investors to portfolio managers, everyone will benefit from this feature.
The total supply of SUNDAE token is capped at 2 billion
SUNDAE Tokenomics:
Majority tokens will be distributed to the public i.e 55%, this includes 5% share of Initial Stake Pool (ISO) participants among 5 epoches. The complete distribution share is shared below –
| Allocation | Tokens |
|---|---|
| Public | 1,100,000,000 |
| Team | 500,000,000 |
| Investors | 260,000,000 |
| Future Hires | 100,000,000 |
| Advisors | 40,000,000 |
SUNDAE Policy ID: 9a9693a9a37912a5097918f97918d15240c92ab729a0b7c4aa144d77
How does SundaeSwap work?
Automated Market Maker:
To start with, SundaeSwap has provided “Automated Market Maker” (AMM) which is the famous model used by top decentralized exchanges across blockchains. In this model, liquidity providers will deposit pair of assets like (BTC-ETH) to the respective liquidity pool and receive tracking tokens in return, representing their share in the liquidity pool.
Each liquidity pool follow the “Constant Product Market Maker” function that keeps the product of the two asset constant. If X is one Asset and Y is another asset then the pool function will be –
X*Y=K
Here K is constant, and the system will always maintain this constant by managing the price of assets in the liquidity pool.
More details on Automated Market Maker is covered in my post on Uniswap Exchange. Since tracking tokens held by the liquidity provider represents the share of tokens in the liquidity pool. Burning these tokens will release the equivalent percentage of assets deposited by the liquidity provider, adjusted at a new price. The liquidity provider will also receive the fee earned as a reward for depositing the asset on the SundaeSwap liquidity pool.
The AMM requires sequence of functions like deposit, withdrawal, swap liquidity to be executed multiple times within a given block. This brings eUTXO into the picture.
Extended Unspent Transaction Outputs (eUTXO):
eUTXO is Cardano’s novel accounting and execution model that takes care of the above mentioned functions in a more complicated and secure manner. It implements smart contracts more passively than an explicit function call and discourage the use of global state. The implementation part is shared below –
A minting policy allows tracking tokens to be generated as long as the appropriate liquidity is deposited and the same policy allows the burning of tracking tokens as long as the appropriate liquidity is withdrawn. It’s the validator script that allows the swaps as long as the pricing function and fee structure is maintained.
How to Swap tokens like Pavia Coin on SundaeSwap?
I have personally used SundaeSwap to purchase PAVIA tokens after its listing on the exchange. The experience was smooth though it took longer for the transaction to process due to the high congestion issue. I have compiled the steps to make it easier for the users planning to make their first purchase on Sundae.
Step 1: Visit the SundaeSwap exchange and connect any wallet from the list shared below –
Step 2: Choose the token you wish to swap. In the following example, I am swapping Cardano ADA tokens with Pavia tokens i.e selling my ADA to purchase PAVIA.
Step 3: Set your slippage tolerance on the bottom left of the window (Keep it default for faster swaps).
Step 4: Click the button & check the final charges and then click Order Swap –
Step 5: A request will pop-up asking you to sign the transaction i.e entering your wallet password –
That’s it you’re done. It’s that simple. Following is the final message displayed onscreen –
SundaeSwap Launch Debacle:
SundaeSwap opened its gate to users on Jan 21, 2022. Unfortunately, the launch failed to impress the investors who were in line to purchase its native tokens SUNDAE. Moments after tweeting “swapping is now live”, the network faced congestion, resulting in rising complaints from users.
Swapping is now LIVE! 🎉🥳
— SundaeSwap Labs 🍨 (@SundaeSwap) January 20, 2022
Head on over to https://t.co/GSGzSuqIcf and swap tokens, deposit liquidity, and enjoy! 🍨💛$SUNDAE Token Policy ID: 9a9693a9a37912a5097918f97918d15240c92ab729a0b7c4aa144d77#Cardano #SundaeSwap pic.twitter.com/jhLK6F8PuJ
Many users complain that they haven’t received their tokens after swapping Cardano ADA tokens for SUNDAE. Although blockchain data suggested that Cardano whales have been able to swap ADA for SUNDAE, whereas retail investors were caught in the act (news by Yahoo).
The congestion was both, a blessing and a curse. Though the network clogged up, the same situation has proved the higher demand for Cardano DEXes. SundaeSwap will be the first DEX to take this advantage.
SUNDAE Coin Price:
Sundae Swap Price Prediction:
Frankly speaking, it’s way too early to predict the price of SUNDAE coin. However, the rising demand will give you a clue how fast it can grow in a span of 1 year. The coin has already crossed $1 mark without trading on the top exchanges like Binance and Coinbase.
It’s in the early adoption stage and is yet to reach the masses. Imagine the coin being listed and available for trading on all the popular exchanges. When that happens, the price of SUNDAE token will likely shoot up beyond $10 mark.
Though everything looks green, one should remember that the project is in its nascent stage and it has to deliver its promise. By introducing attractive rewards for the platform users, it can speed up its marketing game as done by LooksRare (LOOKS Coin) for its NFT marketplace.
Where to buy SUNDAE Coin?
At the moment, SUNDAE can be purchased from its own DEX i.e SundaeSwap.
Is SundaeSwap Coin SUNDAE worth investing?
SundaeSwap is the first decentralized exchange built on the Cardano blockchain. It is all set to facilitate the swapping of Cardano based token like Pavia. The success of SUNDAE token is directly linked with the popularity of other crypto projects built on the Cardano blockchain.
Take for example, when it comes to Uniswap exchange, it lists all ERC20 tokens created on the Ethereum blockchain and the majority of them are very successful like Decentraland MANA coin, Brave Brower BAT Coin etc.
That’s the reason why Uniswap will be the most preferred DEX for the users to access the tokens of these projects. The same goes for Binance’s PancakeSwap exchange.
The project is in demand, the network congestion has already proved it. Given the current price point, SUNDAE is a low-hanging fruit waiting to be picked by the early investors.
If you have faith in Cardano blockchain and believe in decentralized exchanges. This is the token you should not miss.
Watch the complete video review of SundaeSwap DEX –
This completes my review of SundaeSwap DEX. In the next post, I will put some light on Hedera Hashgraph and DeFi Land. If you’re a fan of blockchain technology then please do share it on your social handles and educate everyone around you. Do remember to subscribe to my YouTube channel for more informative content, released every week.
DISCLAIMER:
Cryptocurrency is a highly volatile market. All the information shared in the post is for knowledge purpose only. By no means, it’s financial or investment advice. Readers are responsible for their own investment decisions and should only invest in cryptocurrency after proper research.
Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.