Minswap is a decentralized exchange(DEX) listed on the Cardano blockchain. Its main aim is to enable direct trading of token pairs in a peer-to-peer manner for both experienced traders and newbies in the cryptocurrency field.
The DEX platform was created to be a community-driven exchange that maximizes the stability, scalability, and security the Cardano blockchain offers to give users an improved trading experience. It aims to build on the shortcomings of previous exchange platforms and proffer solutions to these problems with improved and innovative features. Minswap’s improved features include affordable transaction fees, a liquidity pool, and token swaps. With over four million successful trades and hundreds of thousands of active traders, Minswap has proven to be a reliable and trusted DEX platform among traders.
Key Benefits and Features of Minswap
- Low Fees: You can trade your Cardano tokens on Minswap with very affordable and significantly low transaction fees. This affordability makes Minswap stand out among its competitors and gives access to a broader audience to make trades.
- Community-Driven: Minswap prioritizes the involvement of community members and its governance model ensures participants are involved in decision-making and also enables them to vote on changes in protocol democratically.
- Yield farming and staking: Minswap allows users to earn yields and stake their tokens in the liquidity pool to earn more tokens as rewards. This provides more liquidity for users and significantly improves Minswap’s overall liquidity.
- Multifunction liquidity pools: Minswap’s multifunction liquidity pool allows users to provide liquidity in multiple tokens and get rewards in return. This diversifies the risk and potential rewards for liquidity providers on the platform.
- Token Swaps: On Minswap, traders are allowed to swap thousands of tokens through a seamless process.
How does Minswap work?
Minswap operates by putting the principles of decentralized finance (DeFi) into good use. It uses smart contracts to make trades, manage liquidity pools, and share rewards.
The traditional DEX platform operates by enabling permissionless trading of token pairs by two individuals. These trades are facilitated by smart contracts which ensure that the two parties provide liquidity for both of the underlying assets. This means, if a user wants to add funds to a ADA/iUSD trading pair, they need to make it 50/50 to balance the liquidity pool.
Minswap works in a different direction all thanks to its Zap-In feature. With this tool, crypto traders can add liquidity with only one token in a liquidity pool all with a single click. The Minswap smart contract automatically splits the added token into a 50/50 portion to accommodate the other digital asset. This way, users don’t need to engage in manual token swapping or balancing, saving them time and the costs associated with this process.
How to Use Minswap
Want to provide liquidity on Minswap? Below are the steps to get started:
- Visit Minswap
First step is to head to the official Minswap website on minswap.org and click on the ‘Launch Application’ icon to access its DEX interface.
- Connect a wallet
To make trades on Minswap, you have to connect a compatible wallet. Click on the ‘Connect Wallet’ icon and select a preferred option.
The wallet you connect to this account must be under the Cardano blockchain for it to be compatible and once you do this, you can make trades directly from your wallet. Some of the wallets under the Cardano blockchain are Nami, Yoroi, and Daedalus. For mobile users, MinWallet is a great place to start.
- Fund Wallet
Once the wallet is set up, click on the ‘Receive’ icon and send the token you want to fund your wallet with. ADA is the default crypto asset and you can get started with that.
- Swap Tokens
Head to the ‘Trade’ section to swap your digital assets. All you need to do is select the token you want to exchange and the one you intend swapping to. Insert the amount and click on the ‘Confirm’ button if you’re satisfied with the displayed estimation.
- Provide Liquidity
Besides token swaps, you can also add liquidity to different smart contract-powered pools. To do this, hover on the ‘Earn’ icon and select ‘Liquidity’ from the drop-down menu. Then proceed to add the tokens you want to add liquidity with under the ‘Deposit’ icon on the right side of the screen. In the event you want to use only one token, switch it to ‘Zap In’ and add the digital asset of choice. Follow the on-screen prompts to conclude the transaction.
- Earn Rewards
Liquidity providers on Minswap generally earn rewards in the form of trading fees generated by the pool. Rewards can also be gotten from farming programs and they can either be claimed or reinvested to increase earnings.
The Future Of Minswap In the Cardano Ecosystem
Cardano has many projects which run on its blockchain; Minswap is one of these projects and it stands out because of its many useful features and also because it is a platform that allows users to trade tokens and provide liquidity for Cardano. There are various reasons why Minswap is important to the Cardano ecosystem and below, are some of these reasons:
Minswap enhances liquidity on Cardano. Liquidity is very important on every blockchain because it helps the trading process become smooth and worry-free. Minswap contributes to Cardano’s liquidity by offering a platform where users get to trade tokens and this attracts more users and projects to the blockchain, ensuring its growth.
Minswap provides easy access to decentralized finance with the significantly low transaction fees it requires. This contributes to the widespread usage of DeFi especially in places where financial services are limited.
Minswap is an open-source project and this means that developers can build on its attributes. This promotes collaboration with the Cardano community and opens up new features and services that will benefit everyone.
Minswap’s Community-driven approach ensures that everyone has a voice and can make their own additions to whatever is going on the platform. This reinforces its reputation as a truly decentralized exchange.
Conclusion
Minswap is one of the best projects on the Cardano ecosystem because of its useful features built to address user needs. It allows all types of traders whether expert or beginner, to earn and receive rewards on the platform. These are the things that make Minswap a unique project and one that will play a very important role in shaping the future of decentralized finance in Cardano.
