ParaSwap (PSP)

What is ParaSwap?

ParaSwap is a DEX aggregator of the Ethereum platform, which aggregates the best prices on DEX exchanges for users.

At ParaSwap's interface, users can view a summary of the transaction history they have made, including the estimated cost, price drivers, and the minimum number of tokens received. Details of transaction routes are also displayed to help users understand the direction of their token trade and to avoid confusion.

According to the operating principle, ParaSwap acts as an intermediary between DeFi users and DeFi services. It compares liquidity from over 20 DEXs and brings all functions into a single portal for maximum user convenience.

Many well-known investors have come forward to support the ParaSwap protocol. During the project's recent seed funding round, ParaSwap received investment from major companies such as CoinFund, Blockchain Capital, and Arrington XRP Capital. ParaSwap's goal is to become the preferred DEX aggregator on Ethereum, while processing the fastest transactions at the best rates.

How ParaSwap . Works

ParaSwap provides users with an ideal route at a cost effective price through drawing a series of trade routes. It saves users time and effort by simplifying price comparisons and optimizing trading strategies.

When users visit the exchange, ParaSwap determines the best rate through a price aggregator that helps to retrieve the off-chain price. After that, ParaSwap conducts a swap using a smart contract to deposit fees into the wallet. This process can lead to splitting an order into different exchanges if that is the most cost effective.

Highlights of ParaSwap

ParaSwapPool

DEX aggregators generally do not hold or store any liquidity to themselves. In contrast, ParaSwapPool allows users to access ParaSwap's private pools as a source of DeFi liquidity, providing the opportunity for efficient and optimized transactions.

MultiPath

MultiPath is a protocol designed by ParaSwap. Its function is to discover token trading routes during the exchange. MultiPath can also interact with AMM systems and DeFi lending platforms. With MultiPath, ParaSwap users' transactions can be traced to seamless transaction routes through major DeFi protocols such as Compound and Aave.

Cost on ParaSwap

A certain amount of computing power is required to process transaction requests on the Ethereum blockchain. This energy is called gas. Gas fees can fluctuate significantly, depending on the size of the transaction (but not the value) and the amount of activity taking place on the system.

Hedging against slippage

Cryptocurrencies operate in a free market where asset values ​​fluctuate. While users wait for their transactions to be confirmed, other transactions on the system can push the token price up or down. This phenomenon is called "slipping" of prices. ParaSwap has implemented various features to insure against slippage. These features include a “minimum get” amount, as well as holding the token price for a certain period of time using the ParaSwap Pool.

Pros and cons of ParaSwap

By splitting swap orders between different DEXs, ParaSwap is able to offer competitive rates for any swap. Simply select the 2 cryptocurrencies involved in the transaction and ParaSwap will handle the rest. In short, ParaSwap optimizes the swap process for users by plotting the best trading route. It also gives a warning if the user's intended trade is at risk of slippage or failure.

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