Decentralized Finance (DeFi) is important for creating an open financial market with no central control. Most blockchains have a variety of protocols that cater to building a trustless and permissionless financial ecosystem. Fantom in particular has experienced huge interest from the DeFi community due to its low speeds and fast transactions. One the latest DeFi protocols to launch on Fantom is , founded by 0xBuns and DeGatchi. SoulSwap Finance In this post we'll look at SoulSwap Finance, how it works and how it fits into the DeFi ecosystem on Fantom. You can watch the interview below or scroll down for the full interview transcript. How did you get into crypto? I got into it through stocks. My family friend was doing it full time, so I got into it that way but it was too slow. DeGatchi: This led to me learning about crypto whilst working two jobs. Whilst commuting to my job I would learn more about cryptocurrency and was investing into projects as well, I wanted to get even better at being an investor and I figured the best way to do so was by learning about what I was investing in at a technical level. Since then I’ve gone from an investor to a full time coder, working on SoulSwap and other projects. With myself, I started off by moderating cryptocurrency projects. I already have a master’s degree in economics, plus I have programming experience in Python and was teaching Python at my job at the time. 0xBuns: I figured I could use these skills to tinker around with the development side of things in crypto, so I jumped right into it. I started working as a lead Solidity developer for various projects. Eventually I decided to build my own project and that’s how I ended up founding SoulSwap with DeGatchi. We came together to build SoulSwap and later Luxor and TheaterDAO as well. What is SoulSwap? How does it work? SoulSwap is primarily a decentralized exchange (DEX) and it’s an automated market maker (AMM), which means you don’t need to have another person on the other side of the trade, instead you trade tokens with the liquidity pool. 0xBuns: Users are incentivized to add liquidity to these pools by farming liquidity pool tokens (LP Tokens). So a user can provide liquidity for the exchange (SoulSwap) and earn SOUL, the native token for the SoulSwap ecosystem. This is the primary function, however we have branched out and added new features including lending, atomic swaps and passive income strategies via our Coffin Box. We recently rolled out Luxor which is basically a reserve currency and we are also rolling out TheaterDAO as well, which is on the NFT side of things. What problems does SoulSwap solve? The primary problem that SoulSwap solves is sustainability for the long term, which would be the first time for an exchange to do so. 0xBuns: Most exchanges suffer from the potential for projects to come on the exchange, add a lot of liquidity, get a lot of rewards and just leave with that liquidity and all those rewards. The reason for this is because DEX’s currently use a renting model, where they basically rent the liquidity for a little while and give liquidity providers token rewards in exchange. After this, they can just leave with the rewards and liquidity. What we have is a bonding mechanism, so we actually get to keep that liquidity for the long term. This works by users swapping their LP tokens in exchange for SOUL rewards which has led us to owning up to 50% of our liquidity at this moment. And that’s only the tip of the iceberg when it comes to our competitive advantages. We also operate on the Fantom blockchain which enables us to have very quick transactions that take about a second to execute. The cost is very minimal compared to Ethereum where it can cost upwards of $40-$50 for a trade, whereas our trades cost 15-20 cents at most. On top of that we also have a joint venture with TheaterDAO and Luxor. Luxor is able to provide a lot of support for onboarding new projects. They also ensure that new projects are able to use an OlympusDAO type of mechanism, where they can have liquidity that's permanently part of the exchange. This increases the Total Value Locked (TVL) for the exchange and gets the exchange more exposure. Luxor also invests passively into the SoulSwap ecosystem, they currently own 9% of the TVL on SoulSwap. What is the current Total Value Locked (TVL) on SoulSwap? The Total Value Locked (TVL) for SoulSwap right now is around $10 million, when you count the liquidity of our farms and the SOUL that's being staked, plus the protocol owns about $1.6 million. 0xBuns: It (TVL) changes quite a bit, our TVL was a little bit less than that ($10m), so we owned a larger percentage of the protocol liquidity ($1.6m). What helps us continuously garner more liquidity is through the bonding mechanism. We also have farms, some of that liquidity goes into the farms. We don’t own the liquidity that’s being farmed, it’s just part of the TVL of the SoulSwap ecosystem. There’s a renting model for farms but the majority of our SOUL goes to our bonds. How long did it take you to reach a TVL of $10m? When did we start? In September (2021)? 0xBuns: Yeah, September. DeGatchi: So it took us 5 months. 0xBuns: What's SoulSwaps features? Our primary features that attract the most users I would say are the bonds and the farms. DeGatchi: So as Buns was saying, we have the renting model (farms) and the permanent sustainability model which is the bonds. This is how the two models interact with each other: The model with the least users has a higher APR, so users need to switch between the two models to try and get the best APR possible. So when users go into the farms, the APR for the bonds is higher, but when they switch over to bonds, the farm APR goes up, whilst the bond APR goes down. Users are switching between the farms and the bonds, from the temporary liquidity model (farms) into the permanent liquidity model (bonds). It's sort of like a guessing game, with investors trying to see which model has the highest APR and switching between them. Eventually, as we grow and users switch between the models, we're constantly getting this passive inflow of liquidity and self sustainability which nobody else is doing. So I think that's our primary feature that grabs people. We also have a lending feature that we're coming out with. So just like SushiSwaps BentoBox, you'll be able to lend and provide liquidity on liquidity pairs. So that'll be really good. We also have a traditional swap model, just like Uniswap V2 and it's really fast with cheap fees since it's built on Fantom. We also have a launchpad for ERC-20's coming out soon. What is your long-term vision for SoulSwap? I would say our long term vision is to be an all-in-one protocol, everything will be on SoulSwap. DeGatchi: You’ll never have to leave and you can access it from anywhere, your phone, computer or laptop. We’ll be multichain too, so any chain you want to be on, you can be on that whilst using SoulSwap. We’ll have all these different models and services so you’ll never have to leave the SoulSwap protocol. I guess SushiSwap sort of tried to do that, but that collapsed recently. So, we’re only getting better, we have so many services coming out with pretty limitless ideas, so pretty much an all-in-one protocol for investors. What sets you apart from other protocols like Uniswap, SpookySwap, Sushi and PancakeSwap? I gotta say it’s our innovation and our determination to keep going, we don’t take days off. We’ve been working day in, day out for almost a year now. DeGatchi: When it comes to our protocol, I’d say it’s our services and innovation on our products. SpookySwap for example don’t own their liquidity, they’re using Olympus Pro for their bond model, it’s not built into their platform. We have ours built in, we own our liquidity, it’s not going away, it’s staying there and it’s only increasing. And that’s only one thing. We have an NFT Launchpad coming out, I don’t think anyone has done that on Fantom yet. It’s completely permissionless and decentralized with on-chain verification. That’s a big thing that I think the community is really excited about. We also have atomic swaps so users can swap any token they want for free. Plus we’ve been looking into an NFT exchange concept that's currently in the works. Innovation is the main thing, Buns you want to comment on that or did I actually hit the target? Yeah I think you did a great job on hitting the target for that one. 0xBuns: We do have a lot of innovation, we have a very highly motivated community that has provided us with a lot of suggestions that we’ve been able to roll out quite quickly. I think an advantage that we have is that we’re an agile team, we’re able to quickly resolve any issues as they pop up without having a lot of clog in the system. A lot of projects don’t seem to have a quick and efficient system that enables them to work as quickly as we’re able to. We’re also not subject to constraints brought on by having a lot of VC investors that we’re trying to satisfy. We don’t have big VC investors, we’re a very grassroots organization and we have our heads in the ground. We’ve been listening to what the people want and executing on those ideas and I know in the long term that's going to help us a lot. What were your biggest challenges when building SoulSwap? I was very familiar with the blockchain development side of things, especially the smart contracts but dealing with frontend development was my biggest challenge. 0xBuns: Trying to resolve all the bugs on the front end and building out all the different utilities on the front end was my biggest challenge, because I never identified myself as a frontend developer. But I had to take on the role as we’ve grown and as we’ve had a lot of requests from the community to change a lot of things. Yeah I would also say it’s the frontend, we can build smart contracts really quickly and test them. DeGatchi: I think frontend development is what takes the longest time and since we have so many products in the works that are ready to be shipped, we just need to build frontends for them and that’s a timely and costly thing. For example, I’ve been working on the frontend for our NFT Launchpad for a couple weeks, but building all of the tests doesn’t take long at all. We’re looking to hire some frontend developers so we can take that load off and then we’ll go into full gear with shipping of our new products. So yeah, definitely frontend development. What's the purpose and utility of the SOUL token? The SOUL token is primarily a governance token so you’re able to use SOUL to gain voting power. 0xBuns: We also use a combination of pairs and tokens to enable users to have power in the SOUL ecosystem. SOUL is also bought back using the fees from the SoulSwap DEX, so just by holding SOUL you’re benefiting from the fees that are being generated on the protocol. This also has an upward price pressure and price movement on the token. SOUL is able to be paired with a number of other tokens in order to gain a boost to farms. For example, we have pairs such as FTM-SOUL where the APR and the rewards are very high compared to all the other farms, almost ten times as high. You’re also able to stake SOUL for passive income via SEANCE. So whenever you stake your SOUL you get SEANCE as your receipt token which also basically functions as a loan. Since we actually have liquidity for SEANCE, you’re able to use that SEANCE token however you would like. You can hold it, trade it for more SOUL or you can sell it for any other token. You can also pair SEANCE with other tokens and get even more passive income rewards from our exchange. How do you envision SoulSwap integrating further with other projects and protocols? We’ve already integrated with a few protocols, if you’re familiar with 1inch, they’re a DEX aggregator. DeGatchi: So we’re getting added to DEX aggregators right now, like Rubic, Firebird and UniDex. So it’s pretty seamless in that regard. Our launchpads will be really scalable as well. We have a host function so if anybody has a huge community and wants to set up their own launchpad or launch a new project, we can give them a hosting status. They can add themselves as a host, they would earn whatever commission they set and then we get a small percentage of that, so like 5-10% of whatever they get. Anyone can do this. Potluck Protocol and Tombheads are two examples, they both own their own commissions and we get a fee from them. We have a lot of services that are built to be scalable and permissionless so anybody is open to use them. Is there any alpha that you can share about your upcoming NFT launchpad release? Oh yeah DeGatchi that’s you 0xBuns: So one big thing I've already mentioned about our NFT launchpad is the hosting service and SoulSwap will be one of those hosts. DeGatchi: Basically our NFT launchpad allows anyone to create an NFT token for free, they own it completely and it allows them to build up their brand. Let's say you’re an artist and you don’t know how to code but you’ve got into crypto because you’ve heard that a lot of people are making money by selling digital art. You might have a collection you’ve been working on for a couple of years and you want to digitize it. So you create some metadata and get the link for your art, then you put it into a parameter, add your collection name, symbol, how many tokens you have and then you create the contract. You can then use this contract to create an NFT presale or public sale for the first round. Investors can also sell your collection on the secondary market, for example, Opensea or PaintSwap. We have nine different sales models but at the start there will only be three, since the remaining six models are more complex to deal with. There is no limit on NFT minting sales, creators can mint for as long they need to. So basically, you’re a creator, you’ve created your collection, set up your NFT sale model and sold your NFT’s. Let’s say you’ve raised $100,000 from the sale, we’ll get 10% of that amount. Imagine there’s a 100 different NFT collections raising different amounts, we get 10% of whatever any project makes through the minting process. This creates a passive income stream for SoulSwap and I think this will be huge for the Fantom community. I’ve already had people messaging me, telling me thanks for the service since they don’t know how to code. Creators have been learning for days or weeks trying to set up NFT collections and we’ve just automated the process for them, for free. There’s no sign up or application process like our competitors on Ethereum and other blockchains. A lot of platforms claim to be decentralized but they make you go through an application process to join their platform. Then if they like your project they’ll approve it, if not your project could get rejected. But we’re fully decentralized, anyone can set up their own NFT collection for free, without any upfront payments. We just take a 10% commission from the money that is raised. I think it's a win-win for everybody involved. What do you have planned next for the SoulSwap ecosystem? We have a peer-to-peer lending market. DeGatchi: So let’s say you have an NFT and you need to borrow money. You put up your NFT as collateral then you borrow some money, and pay it back when it is due. If you don’t pay it back the lender can seize the NFT that you put up as collateral. So there’s that, there’s also going to be an NFT marketplace where you can buy the floor, set floor orders and stuff like that. That’s all going to be decentralized as well, it’s going to be easily integrated. You’ll be able to make an NFT collection and just like CryptoPunks you’ll be able to create your own marketplace and whitelist the collections that go on it. So let’s say you make 3 different collections, they can all be tradeable on your marketplace. You can integrate that marketplace into your website as well. We’ve already mentioned atomic swaps. Our NFT exchange will be interesting but it’s still in the concept stage. We’re working on an NFT airdropper too, so let's say you create a collection and you want to partner with another project, for example Skullys and The Riot Goools. Skullys is going to be airdropping to Riot Goools, so they’ll need an airdropper tool and we’ll provide that. Riot Goools holders can then claim the NFT’s that are being airdropped by Skullys if they meet the requirements. Any project can use the tool to airdrop NFT’s to other NFT holders. The process will be the same for ERC-20’s etc. So yeah that's a lot happening and it’s going to keep us busy for a long time. Have we covered all of SoulSwaps interesting features? Yeah I guess the only thing I’ll add is that we’re on track to get the Fantom grants. 0xBuns: Once our TVL is double ($20m) the current amount ($10m) we’ll be eligible for a grant that's worth about $3 million from the Fantom foundation. So we’re really looking forward to getting support from the Fantom foundation once we reach that mark. We also have a board for people to provide suggestions, so if anyone wants to provide feedback on a protocol they can go to . soul.sh/vote All of our links are available on our website interface as well. You can easily go to our exchange by visiting and that will send you right into the exchange and that’s a very easy link to remember. soul.sh Finally I’d like to mention that over at Luxor, we have a very high APY right now, around 11,000,000% (11 million percent). The APY is very large and it’s an opportunity to get a good return for farmers. Beyond that I don’t have anything I want to add unless DeGatchi does. There are a few things I want to add. If you go into SoulSwap and you want to do some yield farming, we have set up some games that you can play to farm tokens. DeGatchi: Not a lot of protocols have done this, this basically entails staking and receiving the reward tokens, providing liquidity and other stuff like that. We’ve made a lot of opportunities for bot creators and investors/traders to interact with, you just have to go and find them. Yeah it’s been a really great journey and it’s only going to get better as time goes on. Conclusion As decentralized finance and NFT's continues to grow in popularity, more and more protocols will arrive to provide services to users in the ecosystem. SoulSwap is gearing itself up to take on the challenges that haven't been addressed by other projects so far. This will help the protocol to stand out amongst the rest. I hope you enjoyed this interview! You can keep up with me on Twitter
