ShadeSwap: A Privacy-Preserving StableSwap for Cosmos
Introducing ShadeSwap, a privacy-preserving DEX built with IBC compatibility on Secret Network. Discover its key features and join our community.
Nov 1, 2022
Greetings, Shade Protocol community!
After months of research in 2022, we're thrilled to release the ShadeSwap stableswap whitepaper, introducing a novel asymmetric AMM curve known as SilkSwap. This development empowers us to launch ShadeSwap, a privacy-preserving DEX built with IBC compatibility, powered by Secret Network.
SilkSwap Whitepaper and Cosmos StableSwap Features
ShadeSwap boasts key features that set it apart:
Asymmetric stableswap invariant
Improved gas computation (compared to CURVE)
Tradeable private tokens
Fast (~6 second transaction times)
Low-cost (~0.04% stablecoin trading fees)
Native stablecoin (SILK)
As a user, you can seamlessly bridge stablecoins (USDC, DAI, FRAX, etc.) and other crypto assets (ATOM, OSMO, etc.) onto the Shade App using the ShadeBridge, powered by Axelar and IBC. Once your stablecoins are bridged in, you can trade for other stablecoins with fees as low as 0.04%! This is significantly cheaper than other Cosmos AMMs such as Osmosis, where trading fees for stablecoin to stablecoin trades are as high as ~0.40%.
ShadeSwap Asymmetric Invariant and Computation Efficiency
Shade Protocol introduces a novel curve for trading that improves the computational efficiency of Curve while introducing novel capital protections and controls on trades that diverge from where liquidity is focused on the curve.
In addition to controls over the design of each curve, ShadeSwap optimizes and improves the numerical implementation known as the Newton Method while using the Bisect Method as a fallback.
IBC Enabled DEX and Tradeable Private Tokens
Shade Protocol is built on Secret Network, a blockchain built using the CosmosSDK. Secret Network enabled IBC in September of 2022, empowering tokens on Secret Network (such as SILK & SHD) to be bridged in and out of Secret Network.
Due to IBC connectivity, ShadeSwap will seamlessly onboard other Cosmos L1 assets such as $ATOM, $OSMO, $JUNO, and more. In the future, ShadeSwap as an app may be deployed to multiple blockchains.
All tokens on ShadeSwap use the SNIP token standard of Secret Network, ensuring private token balances and transactions. This ensures that users have privacy by default, and the amount of tokens sent and where to remains encrypted
Self Arbitrage and SILK
One of the most coveted features of ShadeSwap is self-arbitrage: the ability for users to automatically arbitrage their own price impact across ShadeSwap and external DEX pools. This is the first time a DEX has ever integrated self-arbitrage into the trading experience.
SILK is a privacy-preserving stablecoin pegged to a basket of global currencies and commodities. SILK is the flagship product of Shade Protocol, leveraging overcollateralization. SILK will be the primary pairing on both the stableswap as well as the CPMM pairs, increasing the utility of SILK while also deepening available liquidity for users to automatically route across.
Shade Protocol is an ambitious array of application-layer products focused on a simple end-user experience that involves the incorporation of privacy by default. These interconnected privacy-preserving DeFi products built on Secret Network will change DeFi as we know it — empowering the next generation of value creation and exchange. Shade Protocol is launching Silk: a privacy-preserving collateralized, reflexive stablecoin built on Secret Network.
Without privacy, DeFi is incomplete. Traditional financial markets offer a degree of privacy for users, and as a result, offer up greater protections in some capacity than existing DeFi markets. Shade Protocol will be the world’s first truly cohesive decentralized and privacy-preserving financial applications — ushering in a golden era for Web3. Shade Protocol will always push for privacy by default, privacy as an expectation, and privacy as the key to unlocking the full value of a decentralized future.
But we can’t do this without community. We need you to join our community and help make Silk and Shade Protocol a reality.